REGIONAL RATES OF RETURN TO EDUCATION AND TRAINING IN BRITAIN

Using a structural utility-maximizing human capital model of the post- 16 education and training-decision, the paper explores rates of return and lifetime earnings that might influence an individual's decision t o participate in post-compulsory education and training. The paper pre sents ex ante regional rates of return to post-16 further and higher e ducation using information from the General Household Survey in Britai n. Based on the empirical results, implications for education and trai ning policy are drawn. The model demonstrates that there are important differences between expected rates of return to the same qualificatio n in different regions. These returns are influenced by the regional l abour market and are likely to have important influences on the incent ives of individuals to pursue education or to train. The paper also de monstrates the generally low level of differentials in earnings profil es and rates of return in Britain to some qualifications, which furthe r undermine incentives to train.