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Is Additional Schooling Worthless? Revising Zero Returns to Compulsory Schooling in Germany

Kamila Cygan-Rehm

No 7191, CESifo Working Paper Series from CESifo Group Munich

Abstract: This study estimates the effect of compulsory schooling on earnings. For identification, I exploit a German reform that extended the duration of secondary schooling in the 1960s. I find that hourly wages increase by 6%-8% per additional year of schooling. This result challenges prior findings for Germany of zero returns to schooling, obtained by using the same survey data and reform. I show that the earlier estimates suffer from unconsidered institutional details. A complementary analysis using social security records confirms significant effects on earnings, but yields no effects on employment and take-up of public transfers.

JEL-codes: I21 I26 J31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eur and nep-lma
Date: 2018
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