Abstract:

This paper investigates a unique feature of the English educational system to estimate the causal effect of compulsory schooling on labour market outcomes. We examine school leaving rules that allow for discrete variation in exit dates by date of birth within school cohorts. This natural experiment enables a regression discontinuity design that differences out confounding factors discussed in the literature. Individuals compelled to stay in school for as little as three months longer than their classmates tend to achieve significantly higher qualification levels and experience better labour market outcomes. Our analysis of variation of impacts by age of compulsory schooling allows us to provide valuable new insights on the role of education credentials in the labour market.