samlet årgang - Økonomisk Institut - Københavns Universitet

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NATIONALØKONOMISK TIDSSKRIFT 2005. NR. 1
ening (2004) reports that graduates in Denmark take on average 5 1 /2 years more than
necessary in completing their higher education. 2 Frequently cited reasons for this
phenomenon are first of all a late school start 3 plus a delayed start of higher education
with the widely used practice of a 'sabbatical year' of work or study abroad immediately
following high school graduation. Also, the fact that a growing fraction of high
school students spend an extra (voluntary) year in secondary school before going on to
high school, and because Danish students of higher education frequently take longer
than the norm over their degree completion because they either change educational
programs or take non-credit courses. To some extent, this type of behaviour may reflect
rational responses to changing conditions in the labour market so that students take
longer over their education if they expect to be unemployed or face low wages upon
completion. Another effect arising from the labour market could be that Danish students
frequently take up paid work in the labour market alongside their education and
this has a delaying impact on education completion. Thus, an important question would
be to try to assess and quantify the relative importance of these labour market factors on
degree completion time.
In a scenario of tightening labour market conditions in Denmark because of falling
unemployment rates and smaller entering youth cohorts, policy makers warn that
lengthening degree completion times only exacerbates the excess demand for educated
labour. In fact, according to recent projections released by the Danish Employers
Federation (2004), moving students quicker through the educational system would add
22,000 jobs over the next 20 years. Viewed from the micro perspective too, the costs to
lengthening degree completion may be considerable. For example, the returns to a
bachelor degree in business falls from 14% to 4% if the education is started at age 33
instead of age 18. The same delay in obtaining an electrician's education results in a
fall from 7.5% to 4% (Danish Council of Economic Advisors Spring 1995 Report).
A few previous studies have analysed the question of the factors that affect the time to
degree completion, particularly in the case of doctoral study. Tuckerman et al. (1990)
estimates a regression model based on aggregate (field-level) time-series data and
Abedi and Benkin (1987) analyse data from a single Ph.D. granting institution for a
10-year period. A few studies have also analysed completion rates, instead of focusing
only on completers or degree recipients, as this may lead to selection bias. Bowen and
Rudenstine (1992) utilize data on entrants to graduate programs in six fields in 10 major
research universities in the U.S. and find that the type of financial support signifi-
2. This study projects that as a consequence of delaying education completion, between 2002 and 2020,
Denmark will have fallen in rank from 11 th to 14 th globally, in terms of the share of workers with higher
education.
3. Formal schooling starts at age 7 in Denmark, although most children are enrolled in kindergarten/preschool
between ages 3-6.