Do Dropouts Drop Out Too Soon? International Evidence from Changes in School-Leaving Laws

43 Pages Posted: 23 Dec 2003

See all articles by Philip Oreopoulos

Philip Oreopoulos

University of Toronto - Department of Economics; National Bureau of Economic Research (NBER); Canadian Institute for Advanced Research (CIFAR)

Date Written: December 2003

Abstract

This paper studies high school dropout behavior by estimating the long-run consequences to leaving school early. I measure these consequences using changes in minimum school leaving ages often introduced to prevent dropping out and compare results across the United States, Canada, and the United Kingdom. Students compelled to stay in school experience substantial gains to lifetime wealth, health, and other labor market activities for all three countries, and these results hold up against a wide array of specification checks. I estimate dropping out one year later increases present value income by more than 10 times forgone earnings and more than 2 times the maximum lifetime annual wage. The one-year cost to attending high school would have to be extremely large to offset these gains under a model that views education as an investment. Other, sub-optimal, explanations for why dropouts forgo these benefits are considered.

Suggested Citation

Oreopoulos, Philip, Do Dropouts Drop Out Too Soon? International Evidence from Changes in School-Leaving Laws (December 2003). NBER Working Paper No. w10155. Available at SSRN: https://ssrn.com/abstract=478664

Philip Oreopoulos (Contact Author)

University of Toronto - Department of Economics ( email )

150 St. George Street
Toronto, Ontario M5S 3G7
Canada

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

Canadian Institute for Advanced Research (CIFAR)

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Toronto, Ontario
Canada

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