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Do Dropouts Drop Out Too Soon? International Evidence From Changes in School-Leaving Laws

  • Philip Oreopoulos

This paper studies high school dropout behavior by estimating the long-run consequences to leaving school early. I measure these consequences using changes in minimum school leaving ages often introduced to prevent dropping out and compare results across the United States, Canada, and the United Kingdom. Students compelled to stay in school experience substantial gains to lifetime wealth, health, and other labor market activities for all three countries, and these results hold up against a wide array of specification checks. I estimate dropping out one year later increases present value income by more than 10 times forgone earnings and more than 2 times the maximum lifetime annual wage. The one-year cost to attending high school would have to be extremely large to offset these gains under a model that views education as an investment. Other, sub-optimal, explanations for why dropouts forgo these benefits are considered.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10155.

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Date of creation: Dec 2003
Date of revision:
Publication status: published as Oreopoulos, Philip, 2007. "Do dropouts drop out too soon? Wealth, health and happiness from compulsory schooling," Journal of Public Economics, Elsevier, vol. 91(11-12), pages 2213-2229, December.
Handle: RePEc:nbr:nberwo:10155
Note: ED LS CH
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  1. Zvi Eckstein & Kenneth I. Wolpin, 1999. "Why Youths Drop Out of High School: The Impact of Preferences, Opportunities, and Abilities," Econometrica, Econometric Society, vol. 67(6), pages 1295-1340, November.
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  11. Lance Lochner & Enrico Moretti, 2001. "The Effect of Education on Crime: Evidence from Prison Inmates, Arrests, and Self-Reports," NBER Working Papers 8605, National Bureau of Economic Research, Inc.
  12. Chiswick, Barry R, 1969. "Minimum Schooling Legislation and the Cross-Sectional Distribution of Income," Economic Journal, Royal Economic Society, vol. 79(315), pages 495-507, September.
  13. Adriana Lleras-Muney, 2002. "The Relationship Between Education and Adult Mortality in the United States," NBER Working Papers 8986, National Bureau of Economic Research, Inc.
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  15. Baland, J.M. & Robinson, J.A., 1998. "Rotten Parents," Papers 207, Notre-Dame de la Paix, Sciences Economiques et Sociales.
  16. Philip Oreopoulos, 2003. "Do Dropouts Drop Out Too Soon? Evidence from Changes in School-Leaving Laws," Working Papers oreo-03-01, University of Toronto, Department of Economics.
  17. J.D. Angrist & Guido W. Imbens & D.B. Rubin, 1993. "Identification of Causal Effects Using Instrumental Variables," NBER Technical Working Papers 0136, National Bureau of Economic Research, Inc.
  18. Philip Oreopoulos, 2006. "The compelling effects of compulsory schooling: evidence from Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 39(1), pages 22-52, February.
  19. Stacey H. Chen, 2002. "Is Investing College Education Risky?," Labor and Demography 0202001, EconWPA.
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