Costs and Benefits of the Austrian Education System

Since 1990, expenditure on education has increased in Austria for every educational level. This has been the result of an extension of education beyond compulsory level as well as a shift from apprenticeships to vocational colleges. The other side of the coin of increasing costs are greater benefits to individuals, employers and society in general arising from a more skilled work force. A longer period devoted to education, and later entry into the workforce, does not only increase the earning power of the persons concerned, but it also brings about significant social rates of return. In today's complex technological world, it is a precondition for sustainable economic and productivity growth. The value of further education is best reflected by the entry wages of school-leavers by educational attainment. High-wage industries pay higher entry wages for graduates of all types than low-wage industries. The lower than average employment growth of high-wage industries has thus contributed to the relative decline in the growth of entry wages paid to higher education school leavers in the 1990s as compared to the 1980s. A comparison of entry wages by type of education between 1992 and 2000 shows that the largest relative wage gains were achieved by middle to upper secondary education school leavers. However, this is not an indication of increased scarcity of these skills in the labour market. Minimum wage policy has tended to raise wages at the lower end of the wage scale more than proportionately, while increasing international competition has tended to reduce the positive wage drift in the highly skilled segment of the workforce. However, the relative scarcity of higher skills is better reflected in unemployment rates than in relative pay increases. Between 1992 and 2000, unemployment rates of workers with apprenticeship training and medium vocational schools increased while they declined for workers with a baccalaureate or university education.