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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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File URL: http://www.nber.org/papers/w10155.pdf
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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
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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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  12. Daron Acemoglu & Joshua Angrist, 2001. "How Large are Human-Capital Externalities? Evidence from Compulsory-Schooling Laws," NBER Chapters, in: NBER Macroeconomics Annual 2000, Volume 15, pages 9-74 National Bureau of Economic Research, Inc.
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  15. 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.
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