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Education Policy and Intergenerational Income Mobility: Evidence from the Finnish Comprehensive School Reform

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Author Info

  • Pekkarinen, Tuomas

    () (Aalto University)

  • Uusitalo, Roope

    () (HECER)

  • Pekkala, Sari

    () (Government Institute for Economic Research, Helsinki)

Abstract

Many authors have recently suggested that the heterogeneity in the quality of early education may be one of the key mechanisms underlying the intergenerational persistence of earnings. This paper estimates the effect of a major educational reform on the intergenerational income mobility in Finland. The Finnish comprehensive school reform of 1972-1977 significantly reduced the degree of heterogeneity in the Finnish primary and secondary education. The reform shifted the tracking age in secondary education from age 10 to 16 and imposed a uniform academic curriculum on entire cohorts until the end of lower secondary school. We estimate the effect of the reform on the correlation between son’s earnings in 2000 and father’s average earnings during 1970-1990 using a representative sample of males born during 1960-1966. The identification strategy relies on a difference-in-differences approach and exploits the fact that the reform was implemented gradually across municipalities during a six-year period. The results indicate that the reform reduced the intergenerational income correlation by seven percentage points.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2204.

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Length: 23 pages
Date of creation: Jul 2006
Date of revision:
Handle: RePEc:iza:izadps:dp2204

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Keywords: comprehensive school reform; education; generational mobility;

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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Gynnar elitklasser eliten?
    by Daniel Waldenström in Ekonomistas on 2009-06-09 04:16:21
  2. Ännu mer om grundskolans effekt på jämlikheten
    by bergh in Berghs Betraktelser on 2009-06-10 11:23:39
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Cited by:
  1. Pascual, Marta, 2009. "Intergenerational income mobility: The transmission of socio-economic status in Spain," Journal of Policy Modeling, Elsevier, vol. 31(6), pages 835-846, November.
  2. Böckerman, Petri & Hämäläinen, Ulla & Uusitalo, Roope, 2007. "Labour Market Effects of Polytechnic Education Reform: The Finnish Experience," MPRA Paper 4412, University Library of Munich, Germany.
  3. Giorgio Brunello & Daniele Checchi, 2007. "Does school tracking affect equality of opportunity? New international evidence," Economic Policy, CEPR & CES & MSH, vol. 22, pages 781-861, October.
  4. Holmlund, Helena, 2007. "A Researcher's Guide to the Swedish Compulsory School Reform," Working Paper Series 9/2007, Swedish Institute for Social Research.
  5. Ludger Woessmann, 2009. "International Evidence on School Tracking: A Review," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 7(1), pages 26-34, 04.
  6. Nina Guyon & Eric Maurin & Sandra McNally, 2012. "The Effect of Tracking Students by Ability into Different Schools: A Natural Experiment," Journal of Human Resources, University of Wisconsin Press, vol. 47(3), pages 684-721.
  7. Stephen Machin & Kjell G. Salvanes & Panu Pelkonen, 2012. "Education And Mobility," Journal of the European Economic Association, European Economic Association, vol. 10(2), pages 417-450, 04.
  8. Pekkarinen, Tuomas & Uusitalo, Roope & Kerr, Sari, 2009. "School tracking and development of cognitive skills," Working Paper Series 2009:6, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  9. Volker Meier & Gabriela Schütz, 2007. "The Economics of Tracking and Non-Tracking," Ifo Working Paper Series Ifo Working Papers No. 50, Ifo Institute for Economic Research at the University of Munich.
  10. Brian Nolan & Gosta Esping-Andersen & Christopher T. Whelan & Bertrand Maitre, 2010. "The Role of Social Institutions in Inter-Generational Mobility," Working Papers 201018, Geary Institute, University College Dublin.
  11. Björklund, Anders & Jäntti, Markus & Lindquist, Matthew J., 2009. "Family background and income during the rise of the welfare state: Brother correlations in income for Swedish men born 1932-1968," Journal of Public Economics, Elsevier, vol. 93(5-6), pages 671-680, June.
  12. Holmlund, Helena, 2006. "Intergenerational Mobility and Assortative Mating. Effects of an Educational Reform," Working Paper Series 4/2006, Swedish Institute for Social Research.
  13. Orsetta Causa & Catherine Chapuis, 2009. "Equity in Student Achievement Across OECD Countries: An Investigation of the Role of Policies," OECD Economics Department Working Papers 708, OECD Publishing.
  14. Santavirta, Torsten, 2010. "How Large are the Effects from Temporary Changes in Family Environment: Evidence from a Child-evacuation Program during WWII," Working Paper Series 8/2010, Swedish Institute for Social Research.

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