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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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  2. 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.
  3. Olof Aslund & John Osth & Yves Zenou, 2009. "How Important is Access to Jobs? Old Question - Improved Answer," CReAM Discussion Paper Series 0925, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
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  7. Björklund, Anders & Lindahl, Mikael & Plug, Erik, 2005. "The Origins of Intergenerational Associations: Lessons from Swedish Adoption Data," IZA Discussion Papers 1739, Institute for the Study of Labor (IZA).
  8. Diego Restuccia & Carlos Urrutia, 2002. "Intergenerational Persistence of Earnings: The Role of Early and College Education," University of Western Ontario, Economic Policy Research Institute Working Papers 20024, University of Western Ontario, Economic Policy Research Institute.
  9. 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).
  10. 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.
  11. Costas Meghir & Mårten Palme, 2005. "Educational Reform, Ability, and Family Background," American Economic Review, American Economic Association, vol. 95(1), pages 414-424, March.
  12. Miles Corak & Andrew Heisz, 1999. "The Intergenerational Earnings and Income Mobility of Canadian Men: Evidence from Longitudinal Income Tax Data," Journal of Human Resources, University of Wisconsin Press, vol. 34(3), pages 504-533.
  13. 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.
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  15. Gary S. Becker & Nigel Tomes, 1994. "Human Capital and the Rise and Fall of Families," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education (3rd Edition), pages 257-298 National Bureau of Economic Research, Inc.
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  17. 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.
  18. 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.
  19. Anders Forslund & Oskar Nordström Stans, 2006. "Swedish Youth Labour Market Policies Revisited," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 75(3), pages 168-185.
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