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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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Publication status: published as Oreopoulos, Philip, 2007. "Do dropouts drop out too soon? Wealth, health and happiness from compulsory schooling," Journal of Public Economics, Elsevier, vol. 91(11-12), pages 2213-2229, December.
Handle: RePEc:nbr:nberwo:10155

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  1. Joshua Angrist & Alan Krueger, 1990. "Does Compulsory School Attendance Affect Schooling and Earnings?," Working Papers, Princeton University, Department of Economics, Industrial Relations Section. 653, Princeton University, Department of Economics, Industrial Relations Section..
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  3. 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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  14. Chiswick, Barry R, 1969. "Minimum Schooling Legislation and the Cross-Sectional Distribution of Income," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 79(315), pages 495-507, September.
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