5. INVESTING IN THE KNOWLEDGE ECONOMY
5.6. Earnings by educational attainment
The earnings premium from education is an impor-
tant incentive for individuals to enrol in tertiary edu- Measuring earnings by educational
cation. In all OECD countries, annual earnings
attainment
increase with educational attainment levels. In
At the international level, educational attain-
Hungary, the average annual earnings of tertiary-level
ment is measured according to the International
diploma holders was more than twice that of upper
Standard Classification of Education
secondary and post-secondary non-tertiary education
(ISCED 1997).
diploma holders in 2006. The next highest relative
earnings were in the Czech Republic (183%), Portugal
Earnings are before-tax income except for
(177%) and the United States (176%). Such earning dif-
Belgium and Korea where they are after-tax
ferentials are traditionally smaller in Nordic countries
income.
(129% in Norway, 126% in Sweden and 125% in
Earnings data for the Czech Republic, Hungary,
Denmark) followed by New Zealand (115%).
Luxembourg, Poland and Portugal exclude
In many OECD countries, earnings differentials
part-time work. Earnings data for Hungary,
between individuals with tertiary education and those
Luxembourg, Poland and Portugal also exclude
with upper secondary education are generally more
part-year or seasonal employment.
pronounced than those between upper secondary and
The length of the reference period is one week for
lower secondary or below. The exceptions are again
Australia, New Zealand and the United Kingdom;
the Nordic countries, but also Australia, Belgium,
one month for Belgium, France, Hungary, Ireland
Canada, New Zealand and Spain.
and Portugal; the calendar year for Austria,
Over the past decade, earnings differentials between
Canada, the Czech Republic, Denmark, Finland,
workers with tertiary education and those with an
Germany, Italy, Luxembourg, the Netherlands,
upper-secondary and post-secondary non-tertiary edu-
Norway, Spain and Sweden; and other 12-month
cational attainment decreased the most in Italy ( 6.4%),
period for Korea, Switzerland and the United
Ireland ( 4.3%), Hungary ( 4%), Germany ( 3.4%) and
States.
Poland ( 2.9%). In other words, the earnings premium
of highly skilled workers decreased compared to that
of medium-skilled workers. The opposite trend is
observed in New Zealand, Spain, Australia and
Source
Sweden where the earnings premium of highly skilled
workers increased at an average annual rate of
OECD, raw data for Education at a Glance 2008.
between 1% and 3%.
In terms of gender, at identical levels of education,
Going further
earnings differentials between males and females
remain significant in all OECD countries. In Italy,
OECD (2008), Education at a Glance 2008: OECD Indica-
Germany, the United States and Austria, women earn
tors, OECD, Paris, www.oecd.org/edu/eag2008.
at least 40% less than men with tertiary level attain-
ment. This gap is smaller in Belgium (22%), Luxembourg OECD and Eurostat (1995),  Manual on the Measure-
(25%), Spain (22%) and Turkey (22%). However, these fig- ment of Human Resources Devoted to S&T   Canberra
ures should be interpreted with caution since most Manual  , OECD general distribution document, OCDE/
countries earnings data include part-time work, GD(95)77, www.oecd.org/dataoecd/34/0/2096025.pdf.
which is an important characteristic of women s
employment.
Figure notes
Population is 24-65 years old.
Changes in earning differentials are calculated as fol-
lows:
[(Final index value/Initial index value)1/n 1] x 100;
where n is equal to the difference between final and
initial year.
OECD SCIENCE, TECHNOLOGY AND INDUSTRY SCOREBOARD 2009 © OECD 2009
142
5. INVESTING IN THE KNOWLEDGE ECONOMY
5.6. Earnings by educational attainment
Relative earnings by level of education, 2006
Upper secondary and post-secondary non-tertiary education = 100
Below upper secondary Tertiary
% of index
250
200
ISCED 3/4= 100
150
100
50
0
1 2 http://dx.doi.org/10.1787/746738877323
Change in earning differentials Differences in earnings between females and males,
2006
As compared to workers with ISCED 3/4
Average annual growth rate
Average annual earnings of females as a percentage of males earning
Tertiary
Tertiary
Below upper secondary
Below upper secondary
Italy (1998-2004) Italy (2004)
Germany
Ireland (1998-2004)
United States
Hungary (2001-06)
Austria
Germany (2000-06)
Ireland (2004)
Poland (2004-06)
Canada (2005)
Belgium (2000-05)
Netherlands (2002)
Netherlands (1997-2002)
United Kingdom
Korea (1998-2003)
Norway (2005)
New Zealand
United States (2001-06)
Korea (2003)
Canada (1999-2005)
Switzerland
Czech Republic (1999-2006)
Australia (2005)
Denmark (1999-2005)
Finland (2004)
United Kingdom (2001-06)
Denmark (2005)
Portugal (1998-2005)
Portugal (2005)
France (1999-2006)
Czech Republic
Sweden (2005)
Switzerland (2001-06)
France
Finland (1999-2004)
Poland
Norway (1999-2005)
Hungary
Sweden (1999-2005)
Spain (2004)
Australia (1999-2005)
Belgium (2005)
Spain (1998-2004)
Luxembourg (2002)
New Zealand (2001-06)
Turkey (2005)
-8 -6 -4 -2 0 2 4
0 20 40 60 80 100
%
%
1 2 http://dx.doi.org/10.1787/746745505164
1 2 http://dx.doi.org/10.1787/746822606135
OECD SCIENCE, TECHNOLOGY AND INDUSTRY SCOREBOARD 2009 © OECD 2009
143
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