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Just trying to study can cost a lot in your life
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Starting a degree is a risk because, compared to training, it means having to forego a fixed income for longer and at the same time have to cover running costs.
In return, it is assumed that the salary will later be significantly higher than it would have been the case with the average training - and thus you still make a plus in the end.
But what if you drop out of your studies? A new study by the Leibniz Center for European Economic Research (ZEW) comes to the conclusion that a termination results in costs for both the tax authorities and the individual that are not incurred in the rest of the working life. The effects are enormous, because around 28 percent of students dropped out of their bachelor’s degree in 2018, and around one in six the master’s degree.
According to the simulation by the ZEW researchers, this will turn into double negative business: on the one hand, for the public budget, since the expected income from taxes and fees for those dropping out over the next 40 years will not be able to account for the state expenses for the university place. And on the other hand for the dropouts themselves. Compared to the reference group - high school graduates who had started training straight away - they had a »negative individual return on education«, that is, measurable losses through later entry into the profession and thus later reaching higher salary classes.
A successfully completed degree generated a positive return of 6.6 percent for the state, and even 14.2 percent for the individual based on gross income.
After deducting all taxes and duties, there was still a 7.4 percent higher household income than the reference group, who had completed an apprenticeship directly after graduating from high school.
College dropouts are in a bad position
Despite the high average value, however, the income among students differs quite significantly, depending on the combination of subjects.
Or as it says in the handout of the study: "Lower wages would be possible, for example, if the composition of the graduates' subjects changes further in the direction of the humanities and social sciences." better cards in salary poker.
The dropouts are worse off than the humanities scholars: dropping out after two years in connection with a subsequent three-year vocational training meant a 5.9 percent decline in disposable household income for them.
Also at 5.9 percent was the minus that the state made through the investment.
What can you do about it?
"There are ways to reduce the negative effects," says Friedhelm Pfeiffer, co-author of the study.
This includes, among other things, better education and advice for school leavers: inside about the possibilities and ranges of training.
In addition, measures "support students in successfully completing their studies, such as clearly structured study plans and regular contact with teachers," says Pfeiffer, are expedient.
In other words, things that were not possible or only possible to a very limited extent in many places, especially during the corona pandemic.
