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Does a doctoral degree pay off? An empirical analysis of rates of return of German doctorate holders

Abstract

The empirical analysis examines differences in salaries and working time of doctorate holders in comparison to graduates with a master or equivalent degree (in Germany, the first university degree is called a “diploma” or “state examination” depending on the field of study. The diploma degree and the state examination are equivalent to a Master’s degree as they typically require a 5 year full time study program. Only recently, after the implementation of the so-called Bologna reform in 1998, have German universities started to introduce Bachelor and Master’s degrees), distinguishing between different fields of study. Human capital theory is used as the theoretical basis for our empirical analysis of a sample from the microcensus (2006) of the German Federal Statistical Office. The results indicate that doctorate holders tend to work longer hours than graduates with a master degree, especially doctorate holders in Economics and Law and the Social Sciences. Moreover, a doctoral degree has a positive effect on the income-situation in nearly all tested fields of study. Graduates from the field of Economics and Law in particular earn comparatively high incomes.

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Notes

  1. 1.

    People are defined as full-time workers if the total number of working hours per week is 35 or more.

  2. 2.

    Engineering is a relatively large field of study in Germany. Although, like Natural Science, Math and IT, it is associated with technical capital, it would be interesting to test if rates of return are similar for both fields.

  3. 3.

    All listed values in the following section refer to the average number of working hours per week (arithmetical mean).

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Correspondence to Anne Mertens.

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Mertens, A., Röbken, H. Does a doctoral degree pay off? An empirical analysis of rates of return of German doctorate holders. High Educ 66, 217–231 (2013). https://doi.org/10.1007/s10734-012-9600-x

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Keywords

  • Human capital
  • Rates of return
  • Salary wage differentials
  • Doctorate holders