More investment, less returns? : changing returns to education in Italy across three decades

Educational expansion has often been discussed in terms of possibly declining returns to education. Declining returns would not only menace individual investment strategies but also put under pressure the merit based legitimisation of existing social inequalities. In recent years also Italy witnessed a strong increase in education participation beyond compulsory schooling – though this country still lags behind most of Europe with regard to access to higher education. At the same time, the occupational structure did not show any noteworthy upward shift. The theoretical debate provides arguments supporting both expectations about declining as well as increasing return to education. In this paper we empirically investigate these changes over time. We describe the association between educational attainment and the returns to education in terms of both employment and occupational position based on national labour force survey data covering the period from 1985 to 2010, separately for men and women aged 30-39. Our results show a clear decline of the returns to education, in particular concerning the occupational position accessed by the upper secondary educated. Also the university educated, however, have seen on average their occupational condition become worse, especially in the last years.