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Born to Run Behind? Persistent Relative Age Effects on Earnings

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  • Roed Larsen, Erling
  • Solli, Ingeborg

    ()
    (UiS)

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    Abstract

    The relative age effect is an established phenomenon in the literature, but estimates of its strength and duration vary. In order to study the economic magnitude of the effect, we use Norwegian registry data to investigate how birth month affects earnings throughout the full course of life for all Norwegian males born during the period 1940-1949. We examine earnings from 20 to 68 years of age. Our findings suggest that the youngest within a cohort have a relative age disadvantage in early career years that translates into a relative age advantage during late career years. When observing non-discounted life earnings, we find that the two effects cancel out and leave no relative age imprint on life earnings.

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    File URL: http://dl.dropbox.com/u/8078351/uis_wps_econ_fin/uis_wps_2012_10_larsen_solli.pdf
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    Bibliographic Info

    Paper provided by University of Stavanger in its series UiS Working Papers in Economics and Finance with number 2012/10.

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    Length: 27 pages
    Date of creation: 30 May 2012
    Date of revision:
    Handle: RePEc:hhs:stavef:2012_010

    Contact details of provider:
    Postal: University of Stavanger, NO-4036 Stavanger, Norway
    Web page: http://www.uis.no/research/economics_and_finance
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    Related research

    Keywords: Birth date effects; life earnings;

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    1. Carlos Dobkin & Fernando Ferreira, 2009. "Do School Entry Laws Affect Educational Attainment and Labor Market Outcomes?," NBER Working Papers 14945, National Bureau of Economic Research, Inc.
    2. Puhani, Patrick A. & Weber, Andrea M., 2007. "Persistence of the School Entry Age Effect in a System of Flexible Tracking," Diskussionspapiere der Wirtschaftswissenschaftlichen Fakultät der Leibniz Universität Hannover dp-370, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    3. Sandra E. Black & Paul J. Devereux & Kjell G. Salvanes, 2011. "Too Young to Leave the Nest? The Effects of School Starting Age," The Review of Economics and Statistics, MIT Press, vol. 93(2), pages 455-467, May.
    4. Puhani, Patrick A. & Weber, Andrea M., 2005. "Does the Early Bird Catch the Worm? Instrumental Variable Estimates of Educational Effects of Age of School Entry in Germany," IZA Discussion Papers 1827, Institute for the Study of Labor (IZA).
    5. Michael Fertig & Jochen Kluve, 2005. "The Effect of Age at School Entry on Educational Attainment in Germany," RWI Discussion Papers 0027, Rheinisch-Westfälisches Institut für Wirtschaftsforschung.
    6. Hendrik Jürges & Kerstin Schneider, 2007. "What can go wrong will go wrong: Birthday effects and early tracking in the German school system," MEA discussion paper series 07138, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
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