Ability, Parental Background and Education Policy: Empirical

Evidence From a Social Experiment

Presented by: Iryna & Keti 27 Nov. 2006

C. Meghir, M. Palme, IFS, WP 2003

Outline

• Pre- and post-reform school systems

• The program description

• Evaluation question

• Evaluation method

• Data

• Estimation results

• Conclusions

Pre- and post-reform school systems

Pre-reform school system:• A basic compulsory school (7-8 years)

• A junior secondary school (3-4 years), grade-based selection

Limitations:

• Relatively short compulsory education

• not sufficient resources for junior secondary education

• Curriculum of the schools differed between municipalities

Post - reform school system:• Nine year compulsory comprehensive school

• All students went to the same schools

• A centrally decided curriculum

The Program DescriptionGoal: to evaluate the impact of the reform on education attainment and earnings

Experiment duration: 1949-1962

Status: nationwide

Selection: by ’representative’ municipalities and city communities

Family support:

•A non-taxable universal allowance for children up to the age of 16 (1948)

•Means tested stipends (1953)

Evaluation Question

What is the treatment effect on treated?

Outcomes:

• Level of education (qualification); years of education

• Income

Unit of treatment: municipality

Estimation

Evaluation method: propensity score matching (to the nearest neighbor)

Probit estimation of Propensity Score

Assumption: E(lnwit0Xi, Di=1) = (lnwit

0Xi,Di=0)

TT = E(lnwiDi=1) – EF1 { E(lnwi P(Xi), Di=0) }

Data

Data-sets:

• Individual Statistics (IS) Project (social background, socioeconomic situation, test scores, etc)

• National Education Register (education levels, individual assignment)

• Tax Register (earnings over the period 1985-1996)

Sample:

• 10% of the cohort born in 1948 (5744 men and 5540 women)

• Treatment group: 35% of the sample

28% of municipalities (295)

Test score and parental background difference between reform and non-reform pupils

All Stockholm, Gothenburg, Malmo

Excluded Stockholm,

Gothenburg, Malmo

Men Women Men Women Men Women

IQ average 1.026(0.682)

1.103(0.409)

0.277(0.389)

-0.578(1.585)

0.135(0.647)

1.061(0.542)

Average test score

0.976(0.673)

0.827(0.413)

-0.596(1.771)

-1.559(0.465)

0.268(0.647)

0.870(0.531)

Father’s education more than

basic

0.031(0.018)

0.026(0.013)

-0.048(0.054)

-0.077(0.057)

0.020(0.016)

0.023(0.015)

Note: all test scores are normalized to have maximum score at 100. Standard errors adjusted for clustering by municipality in parentheses

Test score and parental background difference between reform and non-reform pupils

All Stockholm, Gothenburg, Malmo

Excluded Stockholm,

Gothenburg, Malmo

Men Women Men Women Men Women

1.026(0.682)

1.103(0.409)

0.277(0.389)

-0.578(1.585)

0.135(0.647)

1.061(0.542)

0.976(0.673)

0.827(0.413)

-0.596(1.771)

-1.559(0.465)

0.268(0.647)

0.870(0.531)

0.031(0.018)

0.026(0.013)

-0.048(0.054)

-0.077(0.057)

0.020(0.016)

0.023(0.015)

In the experiment(n = 4084; 34.18%)

Control group(n=7866; 65.82%)

18.56 4.82

Gothenburg or Malmo, % 11.36 5.44

Other cities, % 44.52 37.01

Rural municipalities, % 36.92 58.17

Cities other than Stockholm, Gothenburg, Malmo

Average population size 28 646 33 009

Mean income 49.57 47.13Rural municipalities

Average population size 7751 5750

Mean income 33.04 30.97

Comparison Between Treatment and Control Municipalities

Share living in Stockholm, %

The impact of the reform on educational qualifications by father’s education and ability

(males and females pooled)

Father’s educationAbility

All

All

Low

All

Law

Law

Law

High

High

All

More than comprehensive/junior secondary

0.019(0.012)

0.027*(0.014)

0.025(0.024)

0.030(0.020)

0.024(0.042)

Years of education

0.247(0.095)

0.318 * (0.099)

0.450*(0.130)

0.223*(0.139)

0.358(0.258)

Sample size 10 650 9 074 4 867 4 207 1 576

The Impact of the Reform on Earnings

Conclusions

Effect on educational achievement:

• Individuals from poor backgrounds, especially with ability below the median

• particularly NO effect for children from wealthier backgrounds

Effect on earnings:

• overall significant increase

• the highest impact for high ability individuals from a low parental background

• extra education for low ability individuals much higher earnings

Direct effect – increase in the amount of compulsory schooling

Indirect effect – facilitate the transition to higher education (abolition of selection at 12 years of age, curriculum became more academic)

GE effects – the reform and non-reform municipalities coexist in the same labor markets; new system was expected to be implemented nationally

Successful Reform!

Thank you!