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...minimum school-leaving above 16.
The paper presents new evidence from the United States and New Brunswick, which raised the age 18 in 2000, for considering whether the other provinces should support and enforce an increase in the school-leaving age. First, the study examines broad data on school enrolment and attainment in these jurisdictions. The finding: partly as a result of weak enforcement, recent changes in the school-leaving age had only a small--but still significant--impact on school completion rates.
The study then delves deeper with a more systematic analysis, which isolates those students specifically affected by changes to the school-leaving age. Based on the results, the study estimates that raising the school-leaving age above 16:
* increases, on average, an individual's length of schooling by between 0.12 and 0.16 years;
* decreases the dropout rate by between 1.2 and 2.1 percentage points; and
* increases the fraction of young adults with at least some college or university by between 1.5 and 2.1 percentage points.
Raising school attainment alone, however, does not indicate successful policy. More important are the effects of raising the school-leaving age above 16 on early unemployment and earnings outcomes for those forced to stay in school longer. The results show that an additional year of compulsory schooling not only lowers the probability of being unemployed but also boosts weekly earnings.
This is the first study to look at the impact of measures raising the school-leaving age over the last 20to 30-year period in North America. Its findings are in line with those of previous studies, which have dealt with increases in the minimum age that occurred in the early half of the 20th century.
The high-school dropout rate in Canada remains uncomfortably high. About 20 percent of Canadians in their twenties--one in five--have no secondary-school certificate and no postsecondary education of any kind. (1) The figure is disturbing because high-school dropouts fare much worse later in life compared to those who obtain more education. They earn, on average, less than high-school graduates and are more likely to be unemployed, draw on social assistance and other welfare programs, end up in jail and be in poorer health. If dropping out causes these bad outcomes, students that drift towards early exit in school stand much to gain from staying on instead.
Provincial education ministries have grappled with finding ways to reduce the number of dropouts. Some suggest lowering class size, others suggest making the curriculum easier, or trying to target at-risk students earlier. An additional possibility, also considered recently by several provinces, is to raise the minimum school-leaving age. This specifies the length of time students must spend in school before having the legal option to leave. Except for New Brunswick, all provinces mandate a minimum school-leaving age of 16. In Alberta, a private member's bill proposing to raise the age to 17 was legislated in 2003, but was never proclaimed (Red Deer Public Schools 2005). The Ontario government said in 2002 it planned to raise the age to 18. It reiterated that commitment in the fall 2005 Throne Speech and a policy announcement is expected very soon.
Support for increasing the school-leaving age often rests on paternalistic hunches that students wishing to leave school early are, in fact, better off if they decide to stay on. In 1998, for example, the Deputy Minister of Education for New Brunswick provided this explanation for the province's decision to raise the minimum school-leaving age to 18:
"[E]ducators must help students fulfill the Mission of Public Education in New Brunswick to acquire the necessary skills, knowledge, and attributes needed to be a life-long learner, to achieve personal fulfillment and to contribute to a productive just and democratic society." (School-leaving Age Task Force 1998.)
And in Ontario, Premier Dalton McGuinty stated:
"We've got a law on the books now that says that you can quit school when you're 16. Think about it. This is the knowledge economy--that no longer makes sense. So we're going to require that young people be in school or learning outside of school ... until they reach the age of 18." (National Post, September 28, 2002.)
But hunches aside, what do the lessons of experience have to say? The purpose of this paper is to present new evidence from New Brunswick and the United States for considering whether the provinces should support and enforce an increase in the legal school-leaving age.
The first part of the paper focuses on whether recent changes in laws to increase the minimum age in Canada and the U.S. had any impact on increasing school enrolment and attainment. Many of the revised laws included exceptions, were poorly enforced, or had little punishment for non-compliance. Partly as a result of weak enforcement, I find that recent increases in the school-leaving age had only a small--but still significant--impact on school completion rates.
Then I apply a more systematic analysis, with findings that lend further support to increasing the school-leaving age. Most interestingly, even though compulsory schooling laws do not mandate any postsecondary education, I find that raising the school-leaving age above 16 increases the fraction of youths with at least some college or university. One notion consistent with this finding is that some individuals compelled to stay longer in high school become more interested in postsecondary education, or view higher education as less daunting than when they were younger. The paper finally considers the employment benefits for students who extend their schooling under compulsion. I estimate the subsequent impact on earnings and employment for the small fraction of students specifically affected by increases in the school-leaving age and who stay in school longer as a result.
A word on methodology: My methodology (see Appendix B) takes into account changes in compulsory school laws in different states at different times. It allows us to estimate not only the overall impact of compulsory school-leaving laws, but also their impact on students specifically affected by them and who would have otherwise left school.
Without this methodology, it is hard to distinguish between the effect of staying in school beyond 16 and the effect of the underlying factors, such as motivation, that lead some teenagers to remain in school longer than others. For example, if we observe that someone who finished high school earns more than someone who didn't, is it because the individual stayed in school longer or is it because the individual is generally more motivated, which led him/her to stay in school longer, and work harder to earn more? If we don't take care to distinguish between the two possibilities, we might assign to extra schooling an advantage that really comes from individual characteristics that are independent of school policies.
The results of my analysis are very similar to older studies. I estimate that individuals compelled to stay in school beyond 16 experience significantly higher earnings and higher opportunities for employment in their early careers. Finding large labour-market gains for individuals forced to stay in school raises the question of why dropouts drop out in the first place. Why do young persons in Canada leave school early if staying on generates attractive gains, on average, to their careers and overall well-being? For dropouts to know what they are doing, they must really hate school to forgo the large expected returns from staying on. Alternatively, perhaps the reasons behind wanting to introduce compulsory schooling laws in the first place are correct: perhaps dropouts are myopic, or underestimate the gains from school, or perhaps social pressures dominate their concerns. Whatever the reasons, one clear recommendation of this paper is that if provinces are serious about raising the school-leaving age, they need to effectively enforce these laws and promote their potential benefits to administrators, parents, and students.
Previous Studies
Previous studies have dealt with increases in the minimum school-leaving age that occurred in the early half of the 20th century. They have consistently found large gains to adult social-economic outcomes. For the United States, Angrist and Krueger (1991) and Acemoglu and Angrist (2001) estimated (using very different methodologies) that annual adult earnings are about 10 percent higher for students compelled to stay a year longer in school. For the United Kingdom, Harmon and Walker (1995) found about 14 percent higher earnings from such compulsory measures. And for Canada, I found similar gains, using provincial law changes between 1915 and 1970, for would-be-dropouts compelled to stay in school.
Other studies have examined the impact of compulsory schooling on nonpecuniary outcomes. Lochner and Moretti (2004) estimated that compulsory schooling lowers the likelihood of committing crime or ending up in jail. Lleras-Muney (2005) estimated an additional year of compulsory schooling substantially lowers the...
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