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The long-term spillover effects of changes in the return to schooling

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  • Abramitzky, Ran
  • Lavy, Victor
  • Pérez, Santiago

Abstract

We study the spillover effects of a reform that substantially increased the returns to schooling in kibbutzim, socialist-oriented communities in Israel. This reform, which induced kibbutz students to improve their high-school academic performance, spilled over to their non-kibbutz peers who attended the same schools. In the short run, the peers improved their high-school outcomes and shifted to courses with higher financial returns. In the long run, they completed more years of post-secondary schooling and increased their earnings. We discuss two possible spillover channels: standard classroom peer effects and increased salience of the relationship between education and financial success.

Suggested Citation

  • Abramitzky, Ran & Lavy, Victor & Pérez, Santiago, 2021. "The long-term spillover effects of changes in the return to schooling," Journal of Public Economics, Elsevier, vol. 196(C).
  • Handle: RePEc:eee:pubeco:v:196:y:2021:i:c:s0047272721000050
    DOI: 10.1016/j.jpubeco.2021.104369
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    More about this item

    Keywords

    Return to schooling; Spillover effects;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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