The profitability of investing in a university degree : a comparison between wages and educations

Abstract: Sweden has during the past decades increased the number of university students. This increase has made some jobs to increase its requirements on their new recruits. This means that highly educated people have to get jobs that they are overqualified for. With an increase in the number of educated people it is possible that wages decreases. This thesis investigates if today’s wages are high enough to finance educations that jobs require. The empirical work is a comparison of wages in five jobs that require a university degree, which are: civil engineer, business administration, law, nurse, and high school teacher. These five wages will be compared to the wage of a manufacturing worker, without an education. The goal is to calculate if a person with a university degree will earn a greater aggregate income than someone without a degree at the age of 65. Further, the possible change in the expected utility of a business administration degree, due to the introduction of the new educational system (the Bologna declaration) will be analyzed. The result shows that three out of the five jobs observed generates an income greater than the compared job that does not require an education.