Higher Education and Earnings in European Countries: a Difference-in-Differences Estimation of the Bologna Process Effect

Abstract

The Bologna process was signed in 1999 by 29 countries, aiming at harmonizing higher education systems across European countries. Among other things, the reform reorganised the tertiary education structure, creating a three-cycle organization: the bachelor’s, the master’s and the doctorate’s cycles. Focusing on four countries – Belgium, France, Germany and the Netherlands –, the Bologna process’s major effect was to extend the tertiary education journey by a year. Using cross-sectional data from the EU Statistics on Income and Living Conditions (EU SILC) for Belgium, France, Germany and the Netherlands from 2005 to 2017, this thesis aims at estimating the effect the Bologna reform has had in terms of returns to tertiary education over the decade. Conducting a difference-in-differences analysis, results reveal a positive and significant joint impact of the Bologna process on the difference in income between secondary and higher education’s graduates in the four countries of interest. Computed at the country level, the difference-in-differences estimation shows a non-significant effect of the Bologna process.