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Ability, Parental Background and Education Policy: Empirical Evidence From a Social Experiment

Ability, Parental Background and Education Policy: Empirical Evidence From a Social Experiment. C. Meghir, M. Palme, IFS, WP 2003. Presented by: Iryna & Keti 27 Nov. 2006. Pre- and post-reform school systems The program description Evaluation question

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Ability, Parental Background and Education Policy: Empirical Evidence From a Social Experiment

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  1. Ability, Parental Background and Education Policy: Empirical Evidence From a Social Experiment C. Meghir, M. Palme, IFS, WP 2003 Presented by: Iryna & Keti 27 Nov. 2006

  2. Pre- and post-reform school systems • The program description • Evaluation question • Evaluation method • Data • Estimation results • Conclusions Outline

  3. Pre-reform school system: • A basic compulsory school (7-8 years) • A junior secondary school (3-4 years), grade-based selection • Limitations: • Relatively short compulsory education • not sufficient resources for junior secondary education • Curriculum of the schools differed between municipalities • Post - reform school system: • Nine year compulsory comprehensive school • All students went to the same schools • A centrally decided curriculum Pre- and post-reform school systems

  4. Goal: to evaluate the impact of the reform on education attainment and earnings • Experiment duration: 1949-1962 • Status: nationwide • Selection: by ’representative’ municipalities and city communities • Family support: • A non-taxable universal allowance for children up to the age of 16 (1948) • Means tested stipends (1953) The Program Description

  5. Evaluation Question • What is the treatment effect on treated? • Outcomes: • Level of education (qualification); years of education • Income • Unit of treatment: municipality

  6. Estimation Evaluation method: propensity score matching (to the nearest neighbor) Probit estimation of Propensity Score Assumption: E(lnwit0Xi, Di=1) = (lnwit0Xi,Di=0) TT = E(lnwiDi=1) – EF1 {E(lnwiP(Xi), Di=0) }

  7. Data-sets: • Individual Statistics (IS) Project (social background, socioeconomic situation, test scores, etc) • National Education Register (education levels, individual assignment) • Tax Register (earnings over the period 1985-1996) • Sample: • 10% of the cohort born in 1948 (5744 men and 5540 women) • Treatment group: 35% of the sample • 28% of municipalities (295) Data

  8. Comparison Between Treatment and Control Municipalities Share living in Stockholm, %

  9. The impact of the reform on educational qualifications by father’s education and ability (males and females pooled)

  10. The Impact of the Reform on Earnings

  11. Effect on educational achievement: • Individuals from poor backgrounds, especially with ability below the median • particularly NO effect for children from wealthier backgrounds • Effect on earnings: • overall significant increase • the highest impact for high ability individuals from a low parental background • extra education for low ability individuals  much higher earnings Conclusions

  12. Successful Reform! Direct effect – increase in the amount of compulsory schooling Indirect effect – facilitate the transition to higher education (abolition of selection at 12 years of age, curriculum became more academic) GE effects – the reform and non-reform municipalities coexist in the same labor markets; new system was expected to be implemented nationally

  13. Thank you!

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