The Effects of Relative School Starting Age on Educational Outcomes in Finland

In Finland, children start school during the calendar year they turn seven years old. This creates a discontinuous jump in school starting age. I utilize a regression discontinuity design and rich register data to study whether this discontinuous jump in the school starting age affects educational outcomes. I find that the school starting age law generates a significant jump in the school starting age at the turn of the year, which in turn affects educational outcomes. According to my results, those who are born just after new year have on average a 0.15 grade points higher GPA and are significantly more likely to be admitted to and graduate from general upper secondary school. In addition, I study heterogeneity in the results and find that the effect is significantly stronger for females than males. The findings may be taken as a causal effect of relative school starting age. To support this, I show that the density of assignment variable and various background variables evolve continuously in the vicinity of New Year. Theoretical literature offers three potential mechanisms that could explain the effects of school starting age. Firstly, the deviation may arise from the optimal school starting age. Secondly, the gaps may be caused by peer effects and lastly, relatively older children may perform better since they take the exams at an older age. I cannot distinguish between the different channels, and hence my results should be taken as a combined effect of all mechanisms.