Books are Forever: Early Life Conditions, Education and Lifetime Earnings in Europe

48 Pages Posted: 9 May 2012

See all articles by Giorgio Brunello

Giorgio Brunello

University of Padua - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute for Economic Research); Institute for the Study of Labor (IZA)

Guglielmo Weber

University of Padua - Department of Economics; Centre for Economic Policy Research (CEPR); Institute for Fiscal Studies (IFS)

Christoph Weiss

European Union - European Investment Bank

Date Written: May 8, 2012

Abstract

We estimate the effect of education on lifetime income in Europe, by distinguishing between individuals who lived in rural or urban areas during childhood and between individuals who had access to many or few books at age ten. We instrument years of education using reforms of compulsory education in nine different countries, and find that individuals in rural areas were most affected by the reforms. Among those affected, individuals with many books at home at age ten enjoyed substantially higher returns to their additional education. We argue that the long-lasting beneficial effects of having books at home are due to the cultural environment in the household and the development of cognitive skills rather than to the presence of short-term liquidity constraints.

Keywords: lifetime earnings, returns to education, Europe

JEL Classification: J24

Suggested Citation

Brunello, Giorgio and Weber, Guglielmo and Weiss, Christoph, Books are Forever: Early Life Conditions, Education and Lifetime Earnings in Europe (May 8, 2012). ISER Discussion Paper No. 842, Available at SSRN: https://ssrn.com/abstract=2054407 or http://dx.doi.org/10.2139/ssrn.2054407

Giorgio Brunello (Contact Author)

University of Padua - Department of Economics ( email )

via Del Santo 33
35121 Padova
Italy
+39 049 827 4223 (Phone)
+39 049 827 4221 (Fax)

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

Guglielmo Weber

University of Padua - Department of Economics ( email )

via Del Santo 33
Padova, 35123
Italy
+39 049 827 4271 (Phone)
+39 049 827 4221 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Institute for Fiscal Studies (IFS) ( email )

7 Ridgmount Street
London, WC1E 7AE
United Kingdom

Christoph Weiss

European Union - European Investment Bank ( email )

98-100 Boulevard Konrad Adenauer
L-2950
Luxembourg

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