Is Additional Schooling Worthless? Revising the Zero Returns to Compulsory Schooling in Germany

52 Pages Posted: 5 Nov 2018

See all articles by Kamila Cygan-Rehm

Kamila Cygan-Rehm

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg

Date Written: August 23, 2018

Abstract

This study estimates the effect of compulsory schooling on earnings. For identification, I exploit a German reform that extended the duration of secondary schooling in the 1960s. I find that hourly wages increase by 6%-8% per additional year of schooling. This result challenges prior findings for Germany of zero returns to schooling, obtained by using the same survey data and reform. I show that the earlier estimates suffer from unconsidered institutional details. A complementary analysis using social security records confirms significant effects on earnings, but yields no effects on employment and take-up of public transfers.

JEL Classification: I210, I260, J310

Suggested Citation

Cygan-Rehm, Kamila, Is Additional Schooling Worthless? Revising the Zero Returns to Compulsory Schooling in Germany (August 23, 2018). CESifo Working Paper Series No. 7191. Available at SSRN: https://ssrn.com/abstract=3274563

Kamila Cygan-Rehm (Contact Author)

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg ( email )

Schloßplatz 4
Bavaria 91054
Germany

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