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The Effect of Age at School Entry on Education and Income

Daiji Kawaguchi ()

ESRI Discussion paper series from Economic and Social Research Institute (ESRI)

Abstract: Children start their schooling at different actual ages because schools accept entering students only once a year. Those born in a late month in a school cohort are said to be handicapped because they are behind their peers in terms of physical and mental development. Primary schools in Japan accept entering students on April 1 and children who turns 6 by that date enter primary schools. Thus, those who are born on April 1 enter primary schools at exactly age 6, while those who are born on April 2 enter primary schools at almost age 7. Thus, for any particular cohort, those who are born in April are more mature than those who are born in March in terms of their physical and mental development. This relative maturity in the same school cohort might act favorably to those who are born in April. This paper reports the effect of the month of birth on educational attainment and labor market outcomes for both sexes, using a large- scale, Japanese labor force survey. Japan is an ideal country for examining the relative age effect because the length of compulsory education does not vary by the birth month. Thus, the variation of educational attainment across birth months is necessarily induced by individual choice, and the systematic difference in individual choice by birth month is most likely to be a product of the relative age effect. The result indicates that April-born children have 0.15 year more education than March-born children, with an average educational attainment of 12.6 years among males. Similar results are obtained for females. This difference in educational attainment between March-born and April-born individuals, however, does not translate into income differences. This is because Aprilborn individuals over-perform in terms of educational attainment, but this over-performance is not rewarded in the labor market. Evidence from the sudden decline of population size due to a cultural superstition is consistent with the relative age effect rather than the absolute age effect.

Pages: 49 pages
Date: 2006-06
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