Risks and Returns to Educational Fields - A financial asset approach to vocational and academic education
Applying a financial assets approach, we investigate the risks and returns to investments into different types of human capital. Even so the returns from investing in human capital have expensively been studied, little is known about the properties of the return to different types of human capital. Using information from the German Micro Census, we estimate the risk and returns to around 70 fields of study and differentiate between vocational and academic education. We find that there is a general trade-off between returns and earnings risk and human capital investments. Furthermore, we rank fields of education by their returns per unit of risk and find that academic education is not always superior to vocational education.