Education, Wages & Careers

Over the course of their lifetime, individuals make a variety of important choices that impact their career trajectory and the future options available to them. CReAM research under this theme is concerned with how people make decisions that affect their job prospects and what the consequences of these decisions are, ranging from educational choices, choices about occupations, firms, and further training once they have entered the labour market, to choices about retirement at the end of their labour market career. 

1. Early school exposure and educational choices 

Children’s early experiences are influenced both by pre-school and educational institutions (such as the availability of early child care) and choices made by parents. They may have long-lasting effects on children’s opportunities and labour market outcomes later in life, and impact very differently on children of different socio-economic backgrounds.

Past and current research addresses questions such as: What are the effects of pre-school childcare on later education outcomes of children and which children gain the most from early child care attendance? What is the optimal school starting age, and which children will benefit from starting school earlier? How do mothers’ career choices after childbirth affect education and labour market outcomes of their children?

2. Learning institutions and the effects on individual careers

Learning success and long-term outcomes of individuals are importantly determined by the characteristics of the learning institutions they attend. Countries’ educational systems range from purely academic single path systems to structures that branch into different “tracks” intended to support different talents, by for example providing vocational as well as academic paths, or wide-spread apprenticeship programmes that combine hands-on learning in firms with formal learning in schools. How different learning institutions impact educational and career outcomes is therefore important not only to better understand how individuals’ careers evolve over the life cycle but also how national economies succeed in an increasingly competitive and globalised environment.

Past and current research addresses research questions such as: What are the long-term effects of early tracking on economic outcomes? How important are “second chance” options of switching tracks for individual workers’ careers? How do firm-based apprenticeship training schemes affect economic outcomes of individuals, and do they provide workers with mostly transferable or specific skills? Why do firm-based apprenticeship schemes work well in some countries, but not in others? 

3. Career choices and the sources of wage growth

After completion of full-time education, individuals make further important choices, such as deciding whether to invest into further training, which occupations and firms to work in, and when to retire. Moreover, throughout their careers individuals are often hit by various shocks, such as redundancy due to mass layoffs or technological innovations that may render their skills obsolete. 

Past and current research investigates issues such as: How do individuals make choices throughout their labour market history, and how are these choices determined by their underlying talents and individual preferences, as well as external factors such as economic shocks? What are the sources of wage growth over the life cycle and how transferable are skills across occupations and firms? How are careers impacted by technological innovations, and how do individuals respond to technology shocks that may destroy their jobs? How do firms and workers respond to shocks and how do they coordinate their responses? What are the employment and wage losses from job displacement, and what role do firms play in this context?

4. Peer effects, referrals and knowledge spillovers

While most research in economics considers individuals in isolation, individual productivity and wages may also be affected by one’s peers and co-workers. Peer pressure may lead individuals to exert more effort, and knowledge spillovers from one worker to another may facilitate the accumulation of skills.

Past and current research is concerned with how the quality of co-workers affects individuals’ wages and careers through both peer pressure and knowledge spillovers. Research also investigates for which types of workers and in which occupations knowledge spillovers are particularly important. Moreover, research has investigated the importance of referrals for careers of workers.

Our research publications

CReAM researchers publish their findings on this and other topics in top peer-reviewed journals. Click here to see our published research.

Other research themes