IDEAS home Printed from https://ideas.repec.org/a/ecj/econjl/v119y2009i536p516-539.html
   My bibliography  Save this article

Changes in Compulsory Schooling, Education and the Distribution of Wages in Europe

Author

Listed:
  • Giorgio Brunello
  • Margherita Fort
  • Guglielmo Weber

Abstract

Using data from 12 European countries and the variation across countries and over time in the changes of minimum school leaving age, we study the effects of the quantity of education on the distribution of earnings. We find that compulsory school reforms significantly affect educational attainment, especially among individuals belonging to the lowest quantiles of the distribution of ability. There is also evidence that additional education reduces conditional wage inequality, and that education and ability are substitutes in the earnings function. Copyright © The Author(s). Journal compilation © Royal Economic Society 2009.

Suggested Citation

  • Giorgio Brunello & Margherita Fort & Guglielmo Weber, 2009. "Changes in Compulsory Schooling, Education and the Distribution of Wages in Europe," Economic Journal, Royal Economic Society, vol. 119(536), pages 516-539, March.
  • Handle: RePEc:ecj:econjl:v:119:y:2009:i:536:p:516-539
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. 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.
    2. Aakvik, Arild & Salvanes, Kjell G. & Vaage, Kjell, 2003. "Measuring Heterogeneity in the Returns to Education in Norway Using Educational Reforms," IZA Discussion Papers 815, Institute of Labor Economics (IZA).
    3. Arnaud Chevalier & Colm Harmon & Ian Walker & Yu Zhu, 2004. "Does Education Raise Productivity, or Just Reflect it?," Economic Journal, Royal Economic Society, vol. 114(499), pages 499-517, November.
    4. Alberto Abadie & Joshua Angrist & Guido Imbens, 2002. "Instrumental Variables Estimates of the Effect of Subsidized Training on the Quantiles of Trainee Earnings," Econometrica, Econometric Society, vol. 70(1), pages 91-117, January.
    5. James Heckman & Flavio Cunha, 2007. "The Technology of Skill Formation," American Economic Review, American Economic Association, vol. 97(2), pages 31-47, May.
    6. Ichino, Andrea & Winter-Ebmer, Rudolf, 1999. "Lower and upper bounds of returns to schooling: An exercise in IV estimation with different instruments," European Economic Review, Elsevier, vol. 43(4-6), pages 889-901, April.
    7. George Baker & Michael Gibbs & Bengt Holmstrom, 1994. "The Wage Policy of a Firm," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(4), pages 921-955.
    8. Kevin Denny & Vincent O'sullivan, 2007. "Can education compensate for low ability? Evidence from British data," Applied Economics Letters, Taylor & Francis Journals, vol. 14(9), pages 657-660.
    9. Colm Harmon; & Ian Walker, 1995. "Estimates of Economic Return to Schooling in the UK," Economics Department Working Paper Series n540195, Department of Economics, National University of Ireland - Maynooth.
    10. Martins, Pedro S. & Pereira, Pedro T., 2004. "Does education reduce wage inequality? Quantile regression evidence from 16 countries," Labour Economics, Elsevier, vol. 11(3), pages 355-371, June.
    11. Omar Arias & Walter Sosa-Escudero & Kevin F. Hallock, 2001. "Individual heterogeneity in the returns to schooling: instrumental variables quantile regression using twins data," Empirical Economics, Springer, vol. 26(1), pages 7-40.
    12. Ma, Lingjie & Koenker, Roger, 2006. "Quantile regression methods for recursive structural equation models," Journal of Econometrics, Elsevier, vol. 134(2), pages 471-506, October.
    13. Lance Lochner & Enrico Moretti, 2004. "The Effect of Education on Crime: Evidence from Prison Inmates, Arrests, and Self-Reports," American Economic Review, American Economic Association, vol. 94(1), pages 155-189, March.
    14. Gianni de Fraja, 2002. "The Design of Optimal Education Policies," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 69(2), pages 437-466.
    15. Card, David & Krueger, Alan B, 1992. "Does School Quality Matter? Returns to Education and the Characteristics of Public Schools in the United States," Journal of Political Economy, University of Chicago Press, vol. 100(1), pages 1-40, February.
    16. Harmon, Colm & Walker, Ian, 1995. "Estimates of the Economic Return to Schooling for the United Kingdom," American Economic Review, American Economic Association, vol. 85(5), pages 1278-1286, December.
    17. Flavio Cunha & James J. Heckman & Susanne M. Schennach, 2010. "Estimating the Technology of Cognitive and Noncognitive Skill Formation," Econometrica, Econometric Society, vol. 78(3), pages 883-931, May.
    18. Sandra E. Black & Paul J. Devereux & Kjell G. Salvanes, 2005. "Why the Apple Doesn't Fall Far: Understanding Intergenerational Transmission of Human Capital," American Economic Review, American Economic Association, vol. 95(1), pages 437-449, March.
    19. Mwabu, Germano & Schultz, T Paul, 1996. "Education Returns across Quantiles of the Wage Function: Alternative Explanations for Returns to Education by Race in South Africa," American Economic Review, American Economic Association, vol. 86(2), pages 335-339, May.
    20. Andrew Chesher, 2005. "Nonparametric Identification under Discrete Variation," Econometrica, Econometric Society, vol. 73(5), pages 1525-1550, September.
    21. Brunello, Giorgio & Fort, Margherita & Weber, Guglielmo, 2007. "“For One More Year with You”: Changes in Compulsory Schooling, Education and the Distribution of Wages in Europe," IZA Discussion Papers 3102, Institute of Labor Economics (IZA).
    22. Griliches, Zvi, 1977. "Education, Income, and Ability: Rejoinder to Cardell and Hopkins," Journal of Political Economy, University of Chicago Press, vol. 85(1), pages 215-215, February.
    23. Costas Meghir & Mårten Palme, 2005. "Educational Reform, Ability, and Family Background," American Economic Review, American Economic Association, vol. 95(1), pages 414-424, March.
    24. Blackburn, McKinley L & Neumark, David, 1993. "Omitted-Ability Bias and the Increase in the Return to Schooling," Journal of Labor Economics, University of Chicago Press, vol. 11(3), pages 521-544, July.
    25. Andreas Hornstein & Per Krusell & Giovanni L. Violante, 2006. "Technical appendix for \"Frictional wage dispersion in search models: a quantitative assessment\"," Working Paper 06-08, Federal Reserve Bank of Richmond.
    26. Violante, Giovanni & Hornstein, Andreas, 2006. "Frictional Wage Dispersion in Search Models: A Quantitative Approach," CEPR Discussion Papers 5935, C.E.P.R. Discussion Papers.
    27. Amanda Gosling & Stephen Machin & Costas Meghir, 2000. "The Changing Distribution of Male Wages in the U.K," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 67(4), pages 635-666.
    28. Andrew Chesher, 2001. "Exogenous impact and conditional quantile functions," CeMMAP working papers 01/01, Institute for Fiscal Studies.
    29. Andrew Chesher, 2003. "Identification in Nonseparable Models," Econometrica, Econometric Society, vol. 71(5), pages 1405-1441, September.
    30. Cunha, Flavio & Heckman, James J. & Lochner, Lance, 2006. "Interpreting the Evidence on Life Cycle Skill Formation," Handbook of the Economics of Education, in: Erik Hanushek & F. Welch (ed.), Handbook of the Economics of Education, edition 1, volume 1, chapter 12, pages 697-812, Elsevier.
    31. Kevin Lang & David Kropp, 1986. "Human Capital Versus Sorting: The Effects of Compulsory Attendance Laws," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 101(3), pages 609-624.
    32. 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.
    33. Andreas Hornstein & Per Krusell & Giovanni L. Violante, 2011. "Frictional Wage Dispersion in Search Models: A Quantitative Assessment," American Economic Review, American Economic Association, vol. 101(7), pages 2873-2898, December.
    34. Stephen Machin & John Van Reenen, 1998. "Technology and Changes in Skill Structure: Evidence from Seven OECD Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(4), pages 1215-1244.
    35. Costas Meghir & Mårten Palme, 2003. "Ability, parental background and educational policy: empirical evidence from a social experiment," IFS Working Papers W03/05, Institute for Fiscal Studies.
    36. Richard Blundell & Lorraine Dearden & Barbara Sianesi, 2005. "Evaluating the effect of education on earnings: models, methods and results from the National Child Development Survey," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 168(3), pages 473-512, July.
    37. Victor Chernozhukov & Christian Hansen, 2005. "An IV Model of Quantile Treatment Effects," Econometrica, Econometric Society, vol. 73(1), pages 245-261, January.
    38. Lang, Kevin, 1993. "Ability Bias, Discount Rate Bias and the Return to Education," MPRA Paper 24651, University Library of Munich, Germany.
    39. Lee, David S. & Card, David, 2008. "Regression discontinuity inference with specification error," Journal of Econometrics, Elsevier, vol. 142(2), pages 655-674, February.
    40. Orley Ashenfelter & Cecilia Rouse, 1998. "Income, Schooling, and Ability: Evidence from a New Sample of Identical Twins," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(1), pages 253-284.
    41. Colm Harmon & Ian Walker & Niels Westergaard-Nielsen (ed.), 2001. "Education and Earnings in Europe," Books, Edward Elgar Publishing, number 2237.
    42. Joshua D. Angrist & Alan B. Keueger, 1991. "Does Compulsory School Attendance Affect Schooling and Earnings?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(4), pages 979-1014.
    43. Roger Koenker & Kevin F. Hallock, 2001. "Quantile Regression," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 143-156, Fall.
    44. Harmon, Harmon & Ian Walker, 1995. "Estimates of the economic return to schooling for the UK," IFS Working Papers W95/12, Institute for Fiscal Studies.
    45. Card, David, 2001. "Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems," Econometrica, Econometric Society, vol. 69(5), pages 1127-1160, September.
    46. repec:zbw:rwidps:0027 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Brunello, Giorgio & Fort, Margherita & Weber, Guglielmo, 2007. "“For One More Year with You”: Changes in Compulsory Schooling, Education and the Distribution of Wages in Europe," IZA Discussion Papers 3102, Institute of Labor Economics (IZA).
    2. Angel de la Fuente & Antonio Ciccone, 2003. "Human capital in a global and knowledge-based economy," UFAE and IAE Working Papers 562.03, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    3. Assaad, Ragui & Aydemir, Abdurrahman B. & Dayioglu-Tayfur, Meltem & Kirdar, Murat Güray, 2023. "Wage Returns to Human Capital Resulting from an Extra Year of Primary School: Evidence from Egypt," IZA Discussion Papers 16037, Institute of Labor Economics (IZA).
    4. Daeheon Choi & Chune Young Chung & Ha Truong, 2019. "Return on Education in Two Major Vietnamese Cities," Sustainability, MDPI, vol. 11(18), pages 1-30, September.
    5. Nikolov, Plamen & Jimi, Nusrat & Chang, Jerray, 2020. "The Importance of Cognitive Domains and the Returns to Schooling in South Africa: Evidence from Two Labor Surveys," Labour Economics, Elsevier, vol. 65(C).
    6. Balestra, Simone & Backes-Gellner, Uschi, 2017. "Heterogeneous returns to education over the wage distribution: Who profits the most?," Labour Economics, Elsevier, vol. 44(C), pages 89-105.
    7. Paul J. Devereux & Robert A. Hart, 2010. "Forced to be Rich? Returns to Compulsory Schooling in Britain," Economic Journal, Royal Economic Society, vol. 120(549), pages 1345-1364, December.
    8. Brunello, Giorgio & Fabbri, Daniele & Fort, Margherita, 2009. "Years of Schooling, Human Capital and the Body Mass Index of European Females," IZA Discussion Papers 4667, Institute of Labor Economics (IZA).
    9. de New, Sonja C. & Schurer, Stefanie & Sulzmaier, Dominique, 2021. "Gender differences in the lifecycle benefits of compulsory schooling policies," European Economic Review, Elsevier, vol. 140(C).
    10. Justin L. Tobias, 2003. "Are Returns to Schooling Concentrated Among the Most Able? A Semiparametric Analysis of the Ability–earnings Relationships," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 65(1), pages 1-29, February.
    11. Eric Maurin & Sandra McNally, 2008. "Vive la Révolution! Long-Term Educational Returns of 1968 to the Angry Students," Journal of Labor Economics, University of Chicago Press, vol. 26(1), pages 1-33.
    12. Daniel A. Kamhöfer & Hendrik Schmitz, 2013. "Analyzing Zero Returns to Education in Germany – Heterogeneous Eff ects and Skill Formation," Ruhr Economic Papers 0446, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    13. Cabus, Sofie J. & De Witte, Kristof, 2011. "Does school time matter?—On the impact of compulsory education age on school dropout," Economics of Education Review, Elsevier, vol. 30(6), pages 1384-1398.
    14. Daniel A. Kamhöfer & Hendrik Schmitz, 2013. "Analyzing Zero Returns to Education in Germany: Heterogeneous Effects and Skill Formation," SOEPpapers on Multidisciplinary Panel Data Research 598, DIW Berlin, The German Socio-Economic Panel (SOEP).
    15. Tony Beatton & Michael P. Kidd & Matteo Sandi, 2020. "School indiscipline and crime," CEP Discussion Papers dp1727, Centre for Economic Performance, LSE.
    16. Clark, Damon, 2023. "School quality and the return to schooling in Britain: New evidence from a large-scale compulsory schooling reform," Journal of Public Economics, Elsevier, vol. 223(C).
    17. Hofmarcher, Thomas, 2021. "The effect of education on poverty: A European perspective," Economics of Education Review, Elsevier, vol. 83(C).
    18. 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.
    19. Matt Dickson, 2013. "The Causal Effect of Education on Wages Revisited," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 75(4), pages 477-498, August.
    20. Kramer, Anica & Tamm, Marcus, 2018. "Does learning trigger learning throughout adulthood? Evidence from training participation of the employed population," Economics of Education Review, Elsevier, vol. 62(C), pages 82-90.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ecj:econjl:v:119:y:2009:i:536:p:516-539. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley-Blackwell Digital Licensing or Christopher F. Baum (email available below). General contact details of provider: https://edirc.repec.org/data/resssea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.