Region returns to education and further disparities

Estimating a return to education fur Germany as a whole gives one return on human capital on average. This article extends the existing literature using a regional perspective. On a federal-state-level the regional returns are estimable. Therefore the dataset is separated due to regional aspects and Heckman-technique is used. Using 95 %-confidence intervall a comparison of the result follows. From that we get regional disparities between East- and Westgermany. Especially for Mecklenburg West-Pomerania, but also Saxony-Anhalt and Thuringia show higher returns to education than other states. Some other studies already show regional disparities in Germany due to macroeconomic differences. Comparing these with the results within a bivariate analysis, we get that federal states which have higher returns to education tend to have a lower economic performance.