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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. 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.
  2. 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.
  3. 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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  7. Gary Solon, 2002. "Cross-Country Differences in Intergenerational Earnings Mobility," Journal of Economic Perspectives, American Economic Association, vol. 16(3), pages 59-66, Summer.
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  9. Susan E. Mayer & Leonard Michael Lopoo, 2001. "Has the Intergenerational Transmission of Economic Status Changed?," JCPR Working Papers 227, Northwestern University/University of Chicago Joint Center for Poverty Research.
  10. Christian Dustmann, 2004. "Parental background, secondary school track choice, and wages," Oxford Economic Papers, Oxford University Press, vol. 56(2), pages 209-230, April.
  11. 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.
  12. Flavio Cunha & James J. Heckman & Lance Lochner & Dimitriy V. Masterov, 2005. "Interpreting the Evidence on Life Cycle Skill Formation," NBER Working Papers 11331, National Bureau of Economic Research, Inc.
  13. 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.
  14. James Heckman & Pedro Carneiro, 2003. "Human Capital Policy," NBER Working Papers 9495, National Bureau of Economic Research, Inc.
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