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Changes in Compulsory Schooling, Education and the Distribution of Wages in Europe*
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We are grateful to R. Winter-Ebmer, F. Wagner, L. Deutsch, S. Perelman, V. Perin, V. Vandenberghe, A. Pill Damm, K. Andersen Ranberg, S. Nurmi, T. Pekkarinnen, A. Laferrére, F. Papadopoulis, G. Psacharopoulos, A. van Soest, H. Oosterbeek, D. Webbink, P. Hootnout, M. Palme, D. Hallberg, A. Klevmarken, K. Denny and L. Romero for help with the country-specific education institutions and data; to J. Angrist, E. Battistin, D. Coviello, M. El-Attar, A. Ichino, E. Rettore, R. Spady, two anonymous referees and to the participants at seminars in Berlin, Bologna, Florence (EUI), UCL (ESPE), Padova, Salerno (Brucchi Luchino) and Warwick (RES) for comments on this and an earlier version (Brunello et al., 2007). The usual disclaimer applies. Fort gratefully acknowledges financial support from AMANDA (Advanced Multidisciplinary Analysis of New Data on Ageing) contract no. QLK6-2002-002426, project ‘Issues in population ageing: an economic analysis’ (Pr. RBAU01YYHW003), and to the Max Weber Programme, as well as the hospitality of the Dept. of Statistical Sciences at the University of Padova. Brunello and Fort acknowledge financial support from the EEEPE Research and Training Network, funded by the European Commission.
Abstract
Using data from 12 European countries and the variation across countries and over time in the changes of minimum school leaving age, we study the effects of the quantity of education on the distribution of earnings. We find that compulsory school reforms significantly affect educational attainment, especially among individuals belonging to the lowest quantiles of the distribution of ability. There is also evidence that additional education reduces conditional wage inequality, and that education and ability are substitutes in the earnings function.