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Educational policy and intergenerational income mobility: evidence from the Finnish comprehensive school reform

  • Pekkarinen, Tuomas

    ()

    (IFAU - Institute for Labour Market Policy Evaluation)

  • Pekkala, Sari

    (Charles River Associates International)

  • Uusitalo, Roope

    (Helsinki School of Economics)

This paper estimates the effect of a major education reform on the intergenerational income mobility in Finland. The Finnish comprehensive school reform of 1972-1977 replaced the old two-track school system with a uniform nine-year comprehensive school and significantly reduced the degree of heterogeneity in the Finnish primary and secondary education. We estimate the effect of this reform on the intergenerational income elasticity using a representative sample of males born during 1960-1966. The identification strategy relies on a difference-in-differences approach and exploits the fact that the reform was implemented gradually across country during a six-year period. The results indicate that the reform reduced the intergenerational income elasticity by about seven percentage points.

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Paper provided by IFAU - Institute for Evaluation of Labour Market and Education Policy in its series Working Paper Series with number 2006:13.

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Length: 32 pages
Date of creation: 11 Nov 2006
Date of revision:
Handle: RePEc:hhs:ifauwp:2006_013
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  1. 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 for the Study of Labor (IZA).
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  5. Forslund, Anders & Nordström Skans, Oskar, 2006. "Swedish youth labour market policies revisited," Working Paper Series 2006:6, IFAU - Institute for Evaluation of Labour Market and Education Policy.
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  7. Becker, Gary S & Tomes, Nigel, 1986. "Human Capital and the Rise and Fall of Families," Journal of Labor Economics, University of Chicago Press, vol. 4(3), pages S1-39, July.
  8. 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.
  9. Zimmerman, David J, 1992. "Regression toward Mediocrity in Economic Stature," American Economic Review, American Economic Association, vol. 82(3), pages 409-29, June.
  10. Cunha, Flavio & Heckman, James J. & Lochner, Lance, 2006. "Interpreting the Evidence on Life Cycle Skill Formation," Handbook of the Economics of Education, Elsevier.
  11. Christian Dustmann, 2004. "Parental background, secondary school track choice, and wages," Oxford Economic Papers, Oxford University Press, vol. 56(2), pages 209-230, April.
  12. Jo Blanden & Alissa Goodman & Paul Gregg & Stephen Machin, 2002. "Changes in Intergenerational Mobility in Britain," CEE Discussion Papers 0026, Centre for the Economics of Education, LSE.
  13. Dearden, Lorraine & Machin, Stephen & Reed, Howard, 1997. "Intergenerational Mobility in Britain," Economic Journal, Royal Economic Society, vol. 107(440), pages 47-66, January.
  14. Holmlund, Bertil & Liu, Qian & Nordström Skans, Oskar, 2006. "Mind the Gap? Estimating the Effects of Postponing Higher Education," Working Paper Series 2006:17, Uppsala University, Department of Economics.
  15. Aslund, Olof & Östh, John & Zenou, Yves, 2006. "How Important Is Access to Jobs? Old Question – Improved Answer," IZA Discussion Papers 2051, Institute for the Study of Labor (IZA).
  16. Johansson, Per, 2006. "Using internal replication to establish a treatment effect," Working Paper Series 2006:3, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  17. Sari Pekkala & Robert E. B. Lucas, 2004. "On the Importance of Finnishing School: Half a Century of Inter-Generational Economic Mobility in Finland," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-141, Boston University - Department of Economics.
  18. 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.
  19. Bjorklund, Anders & Jantti, Markus, 1997. "Intergenerational Income Mobility in Sweden Compared to the United States," American Economic Review, American Economic Association, vol. 87(5), pages 1009-18, December.
  20. Öster, Anna, 2006. "Parental unemployment and children's school performance," Working Paper Series 2006:5, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  21. Gary Solon, 2002. "Cross-Country Differences in Intergenerational Earnings Mobility," Journal of Economic Perspectives, American Economic Association, vol. 16(3), pages 59-66, Summer.
  22. Heisz, Andrew & Corak, Miles, 1998. "The Intergenerational Earnings and Income Mobility of Canadian Men: Evidence from Longitudinal Income Tax Data," Analytical Studies Branch Research Paper Series 1998113e, Statistics Canada, Analytical Studies Branch.
  23. 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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