1. Does school time matter? Sofie Cabus Kristof De Witte Brussels March 7, 2013

2. Contents 1. Literature Review 2. Problem statement 3. Identification and issues 4. Difference-in-differences methodology 5. Results

3. Definition of Early School-Leaver “A young person between the age of 12 and 23 who leaves education without a degree or with only a lower secondary level degree” (European Commission, 2006)

4. 1. Literature review Dropouts have only bleak prospects –Higher risk on long-term unemployment (Psacharapoulos, 2007) –Lower health status (Groot and Maassen van den Brink, 2007) –Intergenerational poverty (Bowles, 1972; Mclanahan, 1985) –Exclusion from society (Sparkes, 1999)

5. 2. Problem statement Number of pupils dropping out of school is high –E.g. Before 2000, more than 20% of all students in EU-12 aged 18-24 left school with only a lower secondary education diploma Lisbon 2000 Summit –halve the year 2000 number of dropouts by 2012 US “No child left behind act” (2001) –High school graduation rate of 90%

6. Dropout prevention measures in the Netherlands  2004 “Attack on Dropout” E.g. better registration of truancy and dropout  2007 Qualification law One-year increase of compulsory education age  2008-09 Covenants Preventive, curative and Compulsory measures De Witte, K. and Cabus, S. (2012). Dropout prevention measures in the Netherlands, an explorative evaluation. Educational Review, 1-22.

7. Compulsory education age in the Netherlands Before August 1, 2007 (1969 Compulsory education law) –Full-time study until age of 16 –Part-time study until age of 17 (combination study - internships) After August 1, 2007 (“2007 Qualification Law”) –Full-time study until age of 16 –Between age 16-18: full-time study to obtain a higher secondary diploma –After age 18, one has “the duty” to obtain a higher secondary diploma. Registration of dropout until age 23.  One-year increase from 17 to 18 years old

8. 3. Identification (1) 2007 Qualification law: one-year increase from 17 to 18 years old Implementation of the 2007 Qualification law –Students 16 years old or younger on August 1 are liable to the policy reform –Students 17 years old or older on August 1 are exempted from the policy’s implications August 1th 2007 may serve as a cut-off date for education policy evaluation

9. 3. Identification (2) Set-up of experiment using 16 and 17 years old of cohort 1990: –Control group: born before August 1 –Treatment group: born after August 1 Evaluation period October 1, 2007

10. 3. Issues 1. Age effects –Dropout rates may differ for different age groups, even in terms of months  Solution: compare 1990 dropout rates with cohort 1989  Evaluation period October 1, 2006 2. Time effects –Dropout rates may differ over time –Sensitization –Revival of the economy  Necessity: control for time effects 2006 - 2007

11. Composition of control group and treatment group

12. 4. Difference-in-differences methodology Assumption: –Comparability of treatment group and control group, except for the liability status? –In other words, are the results driven by the policy intervention and not by other events?

13. Panel Data BRON data (Basisregister Onderwijs) –All students going to school in the Netherlands (1.3 million) No birth dates available Different ESL-policy among dropout regions –Rich set of covariates: gender, household composition, school type, neighborhood characteristics,… DMO data (Dienst Maatschappelijke Ontwikkeling) –Birth dates of all students going to school in the municipality of Amsterdam (one major dropout region) –Cohort 1989 and 1990 includes 12,887 students

14. Descriptive statistics: comparability (1) The data include: –Student characteristics Gender; Household composition; Ethnicity; –School characteristics School types  We observe on the base of these characteristics that treated and untreated students are highly comparable (T-test statistics).

15. Descriptive statistics: Evolution of the dropout rate by treatment group and control group

16. Evolution of the dropout rate by treatment group and control group Students born before August 1 Students born after August 1

17. Evolution of the dropout rate by treatment group and control group Effect mainly driven by the control group  control for various student characteristics

18. Parametric estimation

19. Results

20. Robustness Analysis

21. Summary (1) 1. Dropout rates 17 years old of cohort 1988-1991: parallel (pre-)trend 2. No indication that a possible labor demand shock would have affected liable and non-liable students differently 3. Job market opportunities for 15-25 years old were on average the same in 2006 and 2007. However, more vacancies were fulfilled in 2007 than in 2006 (July-September) 4. Most students who left education without a diploma, left at the end of the school year 2006-07 (June-August) 5. Comparability of control and treatment group, except liability status

22. Summary (2) 6. There is a strong indication that the labor market pulled a last available cohort of relatively low-skilled youngsters out of school; 7. Next available cohort would take another two years before they could legally leave to the labor market; 8. Youngsters anticipated these job market opportunities in times of an economic revival…

23. Further Research Job market opportunities as a determinant of school dropout Long-run effect of one-year increase in compulsory education age –Returns of education –Impact on obtaining higher secondary diploma Retention in grade

24. Sofie Cabus s.cabus@maastrichtuniversity.nl www.tierweb.nl The article is based on: Cabus, S.J. and De Witte K. (2011). Does School Time Matter? On the impact of compulsory education age on school dropout, Economics of Education Review 30(6), 1384-1398.