and do not reflect the views of the DfES. All errors and omissions remain the authors. Executive Summary Policy-makers in almost all countries agree on one thing: namely on the importance of education and skills to ensuring future economic prosperity. A fruitful line of research has focused on determining the impact that acquiring education or training has on an individual’s labour market productivity and earning prospects: this is known as rate of return analysis. The CEE has undertaken extensive research in this area and provided evidence on the returns to a variety of qualifications in the UK (CEE Discussion Papers 4, 6, 35 and 47). The CEE has also investigated specific issues such as the return to basic skills (CEE DP 3), returns to the marginal learner (CEE DP 45), returns to NVQ2 (CEE DP 46), the returns to qualifications acquired in adulthood (CEE DPs 19 and 39) and the returns to training (CEE DP 36). In addition the CEE has researched the range of methodological issues pertaining to rate of return analysis (see CEE DP 5 and 16). In this paper we summarise current understanding on the returns to qualifications, focusing specifically on differences in the economic values of qualifications by sector. First we explain what we mean by rate of return analysis in section 2. In section 3 we then discuss how rates o
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