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School tracking and intergenerational income mobility: Evidence from the Finnish comprehensive school reform

  • Pekkarinen, Tuomas
  • Uusitalo, Roope
  • Kerr, Sari

This paper estimates the effect of a major education reform on intergenerational income mobility. The Finnish comprehensive school reform of 1972-1977 replaced the old two-track school system with a uniform nine-year comprehensive school and shifted the selection of students to vocational and academic tracks from age 11 to age 16. We estimate the effect of this reform on the intergenerational income elasticity using a representative sample of males born between 1960 and 1966. The identification strategy relies on a differences-in-differences approach and exploits the fact that the reform was implemented gradually across the country during a six-year period. The results indicate that the reform reduced the intergenerational income elasticity by 23% from the pre-reform elasticity of 0.30 to post-reform elasticity of 0.23.

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File URL: http://www.sciencedirect.com/science/article/B6V76-4W6Y5FR-1/2/5c47a2b88d4ade28d8191d1ac429ff03
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Article provided by Elsevier in its journal Journal of Public Economics.

Volume (Year): 93 (2009)
Issue (Month): 7-8 (August)
Pages: 965-973

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Handle: RePEc:eee:pubeco:v:93:y:2009:i:7-8:p:965-973
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505578

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  1. Diego Restuccia & Carlos Urrutia, 2004. "Intergenerational Persistence of Earnings: The Role of Early and College Education," American Economic Review, American Economic Association, vol. 94(5), pages 1354-1378, December.
  2. Christian Dustmann, 2004. "Parental background, secondary school track choice, and wages," Oxford Economic Papers, Oxford University Press, vol. 56(2), pages 209-230, April.
  3. Gary S. Becker & Nigel Tomes, . "Human Capital and the Rise and Fall of Families," University of Chicago - Population Research Center 84-10, Chicago - Population Research Center.
  4. Susan E. Mayer & Leonard M. Lopoo, 2004. "Has the Intergenerational Transmission of Economic Status Changed?," Working Papers 0414, Harris School of Public Policy Studies, University of Chicago.
  5. 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.
  6. Daniel Aaronson & Bhashkar Mazumder, 2005. "Intergenerational economic mobility in the U.S., 1940 to 2000," Working Paper Series WP-05-12, Federal Reserve Bank of Chicago.
  7. Carneiro, Pedro & Heckman, James J., 2003. "Human Capital Policy," IZA Discussion Papers 821, Institute for the Study of Labor (IZA).
  8. Solon, Gary, 1999. "Intergenerational mobility in the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 29, pages 1761-1800 Elsevier.
  9. Gary Solon, 2002. "Cross-Country Differences in Intergenerational Earnings Mobility," Journal of Economic Perspectives, American Economic Association, vol. 16(3), pages 59-66, Summer.
  10. Cunha, Flavio & Heckman, James J. & Lochner, Lance John & Masterov, Dimitriy V., 2005. "Interpreting the Evidence on Life Cycle Skill Formation," IZA Discussion Papers 1675, Institute for the Study of Labor (IZA).
  11. Blanden, Jo & Alissa Goodman & Paul Gregg & Stephen Machin, 2002. "Changes in Intergenerational Mobility in Britain," Royal Economic Society Annual Conference 2002 31, Royal Economic Society.
  12. Anders Bohlmark & Matthew J. Lindquist, 2006. "Life-Cycle Variations in the Association between Current and Lifetime Income: Replication and Extension for Sweden," Journal of Labor Economics, University of Chicago Press, vol. 24(4), pages 879-900, October.
  13. Aakvik, Arild & Salvanes, Kjell G & Vaage, Kjell, 2003. "Measuring Heterogeneity in the Returns to Education in Norway Using Educational Reforms," CEPR Discussion Papers 4088, C.E.P.R. Discussion Papers.
  14. Becker, Gary S & Tomes, Nigel, 1979. "An Equilibrium Theory of the Distribution of Income and Intergenerational Mobility," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1153-89, December.
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