De Economist

, Volume 140, Issue 3, pp 293–309 | Cite as

An empirical analysis of university choice and earnings

  • Hessel Oosterbeek
  • Wim Groot
  • Joop Hartog


In this paper we analyze the relations between university choice and earnings. We estimate a model in which a choice function determines the decision to apply to a particular university and thereby the switch to a particular wage regime. The wage structures of the options in turn determine the lifetime earnings prospects associated with those options, and these prospective earnings influence university choice. The results reveal some notable differences between the wage structures of graduates from different universities. In the choice function we find that graduates from different universities differ with respect to social background, gender and the motives that they consider important in choosing a department. A test on the possibility of pooling alternatives establishes heterogeneity of departments. Finally, we find that earnings prospects are not a particularly important factor in the choice of a specific university.


Empirical Analysis International Economic Public Finance Choice Function Social Background 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Commissie Financieringsstructuur Onderzoek en Ontwikkeling, 1985,Rekenschap van creativiteit, The Hague.Google Scholar
  2. Cramer, J.S., 1991,The LOGIT Model: An Introduction for Economists, London.Google Scholar
  3. Cramer, J.S. and Geert Ridder, 1991, ‘Pooling States in the Multinominal Logit Model,’Journal of Econometrics, 47, pp. 267–272.Google Scholar
  4. Freeman, Richard, 1986, ‘Demand for Education,’ in: Orley Ashenfelter and Richard Layard (eds.),Handbook of Labor Economics, Volume 1, Amsterdam.Google Scholar
  5. Gaag, Jacques van der and Wim Vijverberg, 1988, ‘A Switching Regression Model for Wage Determinants in the Public and Private Sectors of a Developing Country,’Review of Economics and Statistics, 70, pp. 244–252.Google Scholar
  6. Garen, John, 1984, ‘The Returns to Schooling: A Selectivity Bias Approach with a Continuous Choice Variable,’Econometrica, 52, pp. 1199–1218.Google Scholar
  7. Hartog, Joop, Gerard Pfann and Geert Ridder, 1989, ‘(Non-)graduation and the Earnings Function: An Inquiry on Self-selection,’European Economic Review, 33, pp. 1373–1395.Google Scholar
  8. Kenny, Lawrence, Lung-Fei Lee, G.S., Maddala and Robert Trost, 1979, ‘Return to College Education: An Investigation of Self-selection Bias Based on the Project Talent Data,’International Economic Review, 20, pp. 775–789.Google Scholar
  9. Kodde, David and M.A.M. Theunissen, 1985,De schoolloopbaan van snelle vwo-leerlingen, sexeongelijkheid en de keuze voor hoger onderwijs, Ministerie van Onderwijs en Wetenschappen, The Hague.Google Scholar
  10. Lee, Lung-Fei, 1978, ‘Unionism and Wage Rates: A Simultaneous Equations Model with Qualitative and Limited Dependent Variables,’International Economic Review, 19, pp. 415–433.Google Scholar
  11. Lee, Lung-Fei, 1983, ‘Generalized Econometric Models with Selectivity,’Econometrica, 51, pp. 507–512.Google Scholar
  12. Manski, Charles and David Wise, 1983,College Choice in America, Cambridge Mass.Google Scholar
  13. McFadden, Daniel, 1974, ‘Conditional Logit Analysis of Qualitative Choice Behavior,’ in: P. Zarembka (ed.),Frontiers in Econometrics, New York.Google Scholar
  14. Mincer, Jacob, 1974,Schooling, Experience, and Earning, NBER, New York.Google Scholar
  15. Micklewright, John, 1989, ‘Choice at Sixteen,’Economica, 56, pp. 25–39.Google Scholar
  16. Oosterbeek, Hessel, 1990, ‘Education and Earnings in the Netherlands; An Empirical Analysis,’European Economic Review, 34, pp. 1353–1375.Google Scholar
  17. Oosterbeek, Hessel, Joop Hartog and Joop Odink, 1990, ‘Wage Differentials between the Public and Private Sectors: An Application to Dutch Economists,’ Mimeo, University of Amsterdam, Faculty of Economics and Econometrics.Google Scholar
  18. Rosen, Sherwin, 1977, ‘Human Capital: Relations between Education and Earnings,’ in: M. Intriligator (ed.),Frontiers in Quantitative Economics, Amsterdam.Google Scholar
  19. Stewart, Mark, 1987, ‘Collective Bargaining Arrangements, Closed Shops and Relative Pay,’Economic Journal, 97, pp. 140–156.Google Scholar
  20. Trost, Robert and Lung-Fei Lee, 1984, ‘Technical Training and Earnings: A Polychotomous Choice Model with Selectivity,’Review of Economics and Statistics, 66, pp. 151–156.Google Scholar
  21. Willis, Robert, 1986, ‘Wage Determinants: A Survey and Reinterpretation of Human Capital Earnings Function,’ in: Orley Ashenfelter and Richard Layard (eds.),Handbook of Labor Economics, Amsterdam.Google Scholar
  22. Willis, Robert and Sherwin Rosen, 1979, ‘Education and Self-selection,’Journal of Political Economy, 87, pp. S7-S36.Google Scholar

Copyright information

© Stenfert Kroese Uitgevers 1992

Authors and Affiliations

  • Hessel Oosterbeek
    • 1
  • Wim Groot
    • 2
  • Joop Hartog
    • 1
  1. 1.Microeconomics SectionUniversity of AmsterdamAmsterdamThe Netherlands
  2. 2.Department of LawUniversity of LeidenNetherlands

Personalised recommendations