Working Paper: NBER ID: w11414
Authors: Jrnsteffen Pischke; Till von Wachter
Abstract: We estimate the impact of compulsory schooling on earnings using the changes in compulsory schooling laws for secondary schools in West German states during the period from 1948 to 1970. While our research design is very similar to studies for various other countries, we find very different estimates of the returns. Most estimates in the literature indicate returns in the range of 10 to 15 percent. We find no return to compulsory schooling in Germany in terms of higher wages. We investigate whether this is due to labor market institutions or the existence of the apprenticeship training system in Germany, but find no evidence for these explanations. We conjecture that the result might be due to the fact that the basic skills most relevant for the labor market are learned earlier in Germany than in other countries.
Keywords: compulsory schooling; Germany; returns to education; labor market outcomes
JEL Codes: I21; J24; J31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| German education system equips students with basic skills earlier (A21) | marginal benefit of additional schooling decreases (I21) |
| structure of the German schooling system (A21) | returns to schooling (I26) |
| introduction of the 9th grade (Y20) | education (I29) |
| introduction of the 9th grade (Y20) | earnings (J31) |
| education (I29) | earnings (J31) |