High School Dropout for Marginal Students: Early-Career Consequences and Labor Market Outcomes

Martin Andresen and Sturla A. Løkken

Journal of Labor Economics, 2026, vol. 44, issue 2, 629 - 665

Abstract: We exploit a randomized high-stakes exam in Norwegian high schools to evaluate consequences of exam fail for an academically marginal and policy-relevant group of students. Failing the exam more than doubles the dropout rate. By age 30, we find evidence for lower educational attainment but no significant effects on labor market earnings. This may be explained by flexible pathways in the educational system: failing students are more likely to switch to vocational training and be self-employed in their early careers. We show that marginal students are disadvantaged and provide evidence on how policymakers can target this group.

Date: 2026
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