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Do Dropouts Drop Out Too Soon? International Evidence From Changes in School-Leaving Laws

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  • Philip Oreopoulos

Abstract

This paper studies high school dropout behavior by estimating the long-run consequences to leaving school early. I measure these consequences using changes in minimum school leaving ages often introduced to prevent dropping out and compare results across the United States, Canada, and the United Kingdom. Students compelled to stay in school experience substantial gains to lifetime wealth, health, and other labor market activities for all three countries, and these results hold up against a wide array of specification checks. I estimate dropping out one year later increases present value income by more than 10 times forgone earnings and more than 2 times the maximum lifetime annual wage. The one-year cost to attending high school would have to be extremely large to offset these gains under a model that views education as an investment. Other, sub-optimal, explanations for why dropouts forgo these benefits are considered.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10155.

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Date of creation: Dec 2003
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Handle: RePEc:nbr:nberwo:10155

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  5. Philip Oreopoulos, 2003. "Do Dropouts Drop Out Too Soon? Evidence from Changes in School-Leaving Laws," Working Papers oreo-03-01, University of Toronto, Department of Economics.
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Cited by:
  1. Andrea Doneschi & Rossana Patron, 2011. "Assessing incentives and risks in training decisions. A methodological note applied to the Uruguayan case," Documentos de Trabajo (working papers) 1511, Department of Economics - dECON.
  2. Jörn-Steffen Pischke & Till von Wachter, 2008. "Zero Returns to Compulsory Schooling in Germany: Evidence and Interpretation," The Review of Economics and Statistics, MIT Press, vol. 90(3), pages 592-598, August.
  3. Pillai N., Vijayamohanan & B. P., Asalatha, 2013. "Objectivizing the Subjective: Measuring Subjective Wellbeing," MPRA Paper 45005, University Library of Munich, Germany.
  4. Grant Johnston, 2004. "Healthy, wealthy and wise? A review of the wider benefits of education," Treasury Working Paper Series 04/04, New Zealand Treasury.
  5. Pekkarinen, Tuomas, 2005. "Gender Differences in Educational Attainment: Evidence on the Role of the Tracking Age from a Finnish Quasi-Experiment," IZA Discussion Papers 1897, Institute for the Study of Labor (IZA).
  6. Philip Oreopoulos, 2006. "Estimating Average and Local Average Treatment Effects of Education when Compulsory Schooling Laws Really Matter," American Economic Review, American Economic Association, vol. 96(1), pages 152-175, March.
  7. Rafael Di Tella & John Haisken-De New & Robert MacCulloch, 2007. "Happiness Adaptation to Income and to Status in an Individual Panel," NBER Working Papers 13159, National Bureau of Economic Research, Inc.

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