Munich, 05.02.2010 – Investments in education are far more advantageous in Germany than investments in material assets such as stocks: Education brings in top yields of up to 18%. This is the result of a current study by The German Institute for Economic Research (Deutsches Institut fuer Wirtschaftsforschung).
The study thereby not only aims at significantly higher income which those with higher education levels can achieve in comparison to those without such education. It also takes into account for the first time that the risk of unemployment is significantly reduced when higher levels of education are achieved - and thus the loss of earnings due to unemployment is reduced. Unemployment not only reduces income during the period of unemployment, the income also remains behind the development of steadily-employed workers.
Since Germany\'s unemployment risk depends on the level of education like no other country, the education yields are relatively high – similar to Sweden. Accordingly, in the old federal states, higher education studies yield almost 9% over a lifetime, and nearly 13% in the new federal states in Germany. Average education levels even bring higher returns. In the four decades from approximately 1950 to 1989, stocks brought a return of just under 6.5 %. The investment in education is by far the winner, on average, compared to stocks.
The German Institute for Economic Research study comes to this conclusion: “... Since the fiscal education returns in Germany are significantly below the estimated private education returns and these are on average higher than private investments in physical capital, there should be sufficient financial incentives for private investment in education. From this point of view, greater private investment in the education costs in the area of tertiary education appears to be justified. The preconditions for this are appropriate models of student financing,...“
Asset class education mobilises private capital for investment in education. The German Institute for Economic Research study is impressive evidence of the potential which this investment category has going for it.
Career Concept (www.career-concept.de) is the "inventor" of privately financed education funds (www.bildungsfonds.de) - also known as study funds - in Germany. Companies, foundations and individual investors provide capital to fund their studies of the selected students. After the completion of studies and entering the work force, the funding recipients repay a portion of their income back into the education fund for the studies of the subsequent generation. Unlike a student loan, there is no repayment obligation in cases of unemployment. CareerConcept works with several universities and colleges, supports thousands of students and is backed by premier investors who are committed to financial and economic return as well as academic education in Germany.
Information: Career Concept AG, Lindwurmstr. 109, 80337 Munich, Tel: 089 / 122800-80, fax: 089 / 122800-87 E-mail: info [AT] career - concept [dot] com, Web: www.career-concept.de, www.bildungsfonds.de, www.studienkredit.de, www.studienfinanzierung.de and www.bachelor-studium.org
Source: DIW
