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The Effect of Education on Poverty: A European Perspective

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This paper provides evidence on the causal relationship between education and poverty. I construct a novel database comprising compulsory schooling reforms in 32 European countries and use them as instruments for education. I find economically large poverty-reducing effects of education among people aged 30 to 80. This holds true for both objective measures of poverty (relative income poverty, lack of basic necessities, weak labor market attachment) and a subjective measure of poverty (self-assessed difficulties in making ends meet). An additional year of education thus reduces not only the likelihood of being classified as living in poverty but also the likelihood of considering oneself to live in poverty. Increases in labor force participation and full-time employment as well as better health are potential mechanisms behind these results.

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  • Hofmarcher, Thomas, 2019. "The Effect of Education on Poverty: A European Perspective," Working Papers 2019:9, Lund University, Department of Economics.
  • Handle: RePEc:hhs:lunewp:2019_009
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    11. Martin Fischer & Ulf-G Gerdtham & Gawain Heckley & Martin Karlsson & Gustav Kjellsson & Therese Nilsson, 2021. "Education and health: long-run effects of peers, tracking and years," Economic Policy, CEPR;CES;MSH, vol. 36(105), pages 3-49.
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    More about this item

    Keywords

    poverty; education; compulsory schooling; social exclusion;
    All these keywords.

    JEL classification:

    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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