Principal investigator: Viviane Pires Ribeiro
Paper Title: Does compulsory school attendance affect schooling and earnings?
Authors: Joshua D. Angrist and Alan B. Krueger
Location of the Intervention: United States
Sample Size: Not specified
Main theme: Education
Main Variable of Interest: School attendance
Type of Intervention: Analysis of the impact of compulsory schooling laws in the United States.
Methodology: Ordinary Least Squares and Two-Stage Least Squares
All developed countries have a compulsory schooling requirement, but little is known about the effect these laws have on educational attainment and income. Given this scenario, Angrist and Krueger (1991) establish that birth date is related to educational attainment due to minimum age policies for school entry and compulsory attendance laws. Individuals born at the beginning of the year start school at a later age and therefore may leave school with less education than individuals born near the end of the year. Furthermore, students who are required to attend school for a longer period receive higher wages as a result of their extra schooling.
Evaluation Context
If the fraction of students who wish to leave school before reaching the legal leaving age is constant across all birthdays, one would expect a student's birthday to influence their final educational achievement. This relationship would be expected because, in the absence of continuous school admissions, students born in different months of the year start school at different ages. This fact, coupled with compulsory schooling laws that require students to attend school until they reach a certain age, produces a correlation between date of birth and years of schooling.
Students born at the beginning of the calendar year are generally older when they enter school than those born at the end of the year. For example, tabulations from the 1960 Census show that, on average, boys born in the first quarter of the year enter first grade at age 6,45, while boys born in the fourth quarter enter first grade at age 6,07. This pattern arises because most school districts only admit students to first grade if they have reached the age of six by January 1st of the academic year in which they enter school. Consequently, students born at the beginning of the year are older when they enter school than students born near the end of the year.
Since children born in the first quarter of the year enter school at a later age, they reach the legal leaving age after attending school for a shorter period of time than those born near the end of the year. Thus, if a fixed fraction of students is limited by compulsory attendance law, those born at the beginning of the year will, on average, have less schooling than those born near the end of the year.
Intervention Details
The study conducted by Angrist and Krueger (1991) explores a natural experiment to estimate the impact of compulsory schooling laws in the United States. The experiment stems from the fact that children born in different months of the year start school at different ages, while compulsory schooling laws generally require students to remain in school until their sixteenth or seventeenth birthday. In effect, the interaction of school entry requirements and compulsory schooling laws obliges students born in certain months to attend school longer than students born in other months. Since someone's birthday is unlikely to be correlated with other personal attributes besides school entry age, birth date generates exogenous variation in education that can be used to estimate the impact of compulsory schooling on education and earnings.
The study's empirical analysis is based on a variety of datasets, each dataset constructed from "Public Use Census Data" (or more specifically, Public Use Census Data). The sample used to calculate the main effects of birth quarter on educational outcomes consists of all males born between 1930-1949 in the 5% sample of the 1980 Census. The sample used to calculate the difference-in-differences estimates of the effect of compulsory schooling laws on enrollment consists of all sixteen-year-olds in each of the following Census samples: the 1% sample of the 1960 Census; the two state 1% samples of the 1970 Census; and the 5% sample from the 1980 Census. The two samples used to calculate the education return estimates consist of males with positive incomes born between 1920-1929 in the three 1% samples from the 1970 Census, and the sample of males with positive incomes born between 1930-1949 in the 5% sample from the 1980 Census. Information on the date of birth in the Censuses is limited to the birth quarter.
Methodology Details
Two methods were used to estimate the return on education: the Ordinary Least Squares (OLS) method and the Two-Stage Least Squares (2SLS) method. The OLS estimate is the education coefficient from a bivariate regression of the log of weekly wages in years of education. To improve the efficiency of the estimates and control for age-related earnings trends, the authors estimated the 2SLS model. 2SLS estimates are used where the identifying source is the variation in education resulting solely from differences in birth date – which, in turn, results from the effect of compulsory schooling laws.
The instruments excluded from the wage equation in the 2SLS estimates are three birth quarter dummies interacting with nine birth year dummies. Since the birth year dummies are also included in the wage equations, the effect of education is identified by the variation in education among birth quarters in each birth year.
Results
Angrist and Krueger (1991) present an analysis of data from three decennial censuses that establish that birth date is indeed related to educational attainment. Notably, in virtually all birth cohorts examined, children born in the first quarter of the year have a slightly lower average level of education than children born at the end of the year. School districts typically require students to be six years old by January 1st of the year they enter school. Therefore, students born at the beginning of the year enter school at a later age and reach the legal leaving age earlier in their educational careers than students born at the end of the year. If the fraction of students wishing to leave school before the legal leaving age is independent of birth date, then the observed seasonal pattern in education is consistent with the view that compulsory schooling restricts some students born at the end of the year from remaining in school longer.
Two additional pieces of evidence link the seasonal pattern in education to the combined effect of school entry age and compulsory schooling laws. First, the seasonal pattern in education is not evident in college graduation rates, nor in postgraduate graduation rates. Since compulsory schooling laws do not require individuals to attend school beyond high school, this evidence corroborates the hypothesis that the relationship between years of schooling and date of birth is entirely due to compulsory schooling laws. Second, by comparing enrollment rates of fifteen- and sixteen-year-olds in states that have a sixteen-year schooling requirement with enrollment rates in states that have a seventeen-year schooling requirement, Angrist and Krueger (1991) found a greater decline in sixteen-year-old enrollment in states that allow sixteen-year-olds to leave school than in states that require sixteen-year-olds to attend school.
The variety of evidence presented by the authors establishes that compulsory schooling laws increase educational performance for those covered by the laws. Thus, it is considered that students who attend school for longer, because of compulsory schooling, receive higher incomes as a result of their greater schooling. The results of the two-stage least squares estimates suggest that men who are required to attend school by compulsory schooling laws receive higher wages due to their greater schooling. The estimated monetary return for an additional year of schooling for those who are required to attend school by compulsory schooling laws is about 7,5%, which hardly differs from the ordinary least squares estimate of the return to education for all male workers.
To verify whether the education-wage relationship is truly a result of compulsory schooling, the authors explored the relationship between income and date of birth for the subsample of graduates. Since these individuals were not restricted by compulsory schooling requirements, they form a natural control group to test whether date of birth affects income for reasons other than compulsory schooling. The results of this exploration suggest that there is no relationship between income and date of birth for men who are not limited by compulsory schooling. This reinforces the interpretation that the two-stage least squares estimate of return to education reflects the effect of compulsory school attendance.
Lessons in Public Policy
Angrist and Krueger (1991) argue that variation in education related to birth date occurs because some individuals, by accident of birth date, are required to attend school longer than others due to compulsory schooling. Using birth season as an instrument for education in an income equation, the authors found a remarkable similarity between estimates by the Ordinary Least Squares method and by the two-stage Least Squares method of the monetary return to education. The differences between the estimates are usually not statistically significant, and any differences that exist tend to suggest that omitted variables, or measurement error in education, may induce a downward bias in the OLS estimate of return to education. This evidence calls into question the importance of omitted variable bias in OLS estimates of return to education, at least for years of schooling around compulsory schooling.
Therefore, the results support the view that students who are required to attend school longer due to compulsory education laws receive higher wages as a result of their extra schooling. Furthermore, compulsory education laws were found to be effective in compelling some students to attend school.
References
ANGRIST, Joshua D.; KEUEGER, Alan B. Does compulsory school attendance affect schooling and earnings?. The Quarterly Journal of Economics, v. 106, no. 4, p. 979-1014, 1991.
