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Out of School and into Trouble? Labor Market Impacts of Decreasing the School Leaving Age

Author

Listed:
  • Adamecz, Anna

    (University College London)

  • Prinz, Daniel

    (World Bank)

  • Vujic, Suncica

    (University of Antwerp)

  • Szabo-Morvai, Agnes

    (KRTK KTI; Centre for Economic and Regional Studies, Institute of Economics)

Abstract

This paper investigates the labor market impacts of a reform that universally lowered the school leaving age from 18 to 16 in Hungary. Using a difference-in-cross-cohort-comparisons approach and linked individual education-employment administrative panel data, we find that the policy led to an increase in the likelihood of dropping out from school and inactivity among individuals aged 16 to 18 but no corresponding increase in employment. Dropouts who were employed predominantly worked in low-skilled occupations. These effects were more pronounced among those from lower socioeconomic status, exacerbating existing inequalities. Our results suggest that the decrease in the school leaving age had adverse effects on school to work transition and did not yield the expected improvements in labor market integration.

Suggested Citation

  • Adamecz, Anna & Prinz, Daniel & Vujic, Suncica & Szabo-Morvai, Agnes, 2025. "Out of School and into Trouble? Labor Market Impacts of Decreasing the School Leaving Age," IZA Discussion Papers 17844, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp17844
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    More about this item

    Keywords

    school leaving age; employment; education reform;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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