Is Additional Schooling Worthless? Revising Zero Returns to Compulsory Schooling in Germany
No 7191, CESifo Working Paper Series from CESifo Group Munich
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)
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