Shortening Childhood: The Labor Market Returns to a Compressed Education

Abstract

What is the impact of “compressing” education – teaching the same content in fewer years – on wages? I use administrative wage data and the staggered introduction of a German school reform to answer this question. I find a considerable causal wage premium of due to this head start, which can be mostly explained by the additional work experience graduates gain from finishing earlier. I find no impact on indicators for job match quality, or different sorting into firms, occupations, or industries. I thus conclude that returns to education have apparently not been affected by the policy.

Alexander Busch

PhD Student in Management

I am a PhD student at MIT researching labour market institutions such as trade unions and collective bargaining.