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Education policy and intergenerational income mobility: Evidence from the Finnish comprehensive school reform

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  • Sari Pekkala
  • Tuomas Pekkarinen
  • Roope Uusitalo

Abstract

This paper estimates the effect of a major education reform on the intergenerational incomemobility in Finland. The Finnish comprehensive school reform of 1972-1977 replaced the old two-trackschool system with a uniform nine-year comprehensive school and significantly reduced thedegree of heterogeneity in the Finnish primary and secondary education. We estimate the effectof this reform on the intergenerational income elasticity using a representative sample of malesborn during 1960-1966. The identification strategy relies on a difference-in-differences approachand exploits the fact that the reform was implemented gradually across country during a six-yearperiod. The results indicate that the reform reduced the intergenerational income elasticity byabout seven percentage points.

Suggested Citation

  • Sari Pekkala & Tuomas Pekkarinen & Roope Uusitalo, 2006. "Education policy and intergenerational income mobility: Evidence from the Finnish comprehensive school reform," Working Papers 222, Työn ja talouden tutkimus LABORE, The Labour Institute for Economic Research LABORE.
    • Handle: RePEc:pst:wpaper:222
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    1. Gynnar elitklasser eliten?
      by Daniel Waldenström in Ekonomistas on 2009-06-09 09:16:21
    2. Ännu mer om grundskolans effekt på jämlikheten
      by bergh in Berghs Betraktelser on 2009-06-10 16:23:39

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    Cited by:

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    2. Böckerman, Petri & Hämäläinen, Ulla & Uusitalo, Roope, 2009. "Labour market effects of the polytechnic education reform: The Finnish experience," Economics of Education Review, Elsevier, vol. 28(6), pages 672-681, December.
    3. Elvana Hana & Arsena Gjipali, 2010. "What Determines Upper Secondary School Participation? - Intergenerational Effects Of Education Outcomes In Albania," Journal Articles, Center For Economic Analyses, pages 17-31, June.
    4. Holmlund, Helena, 2007. "A Researcher's Guide to the Swedish Compulsory School Reform," Working Paper Series 9/2007, Stockholm University, Swedish Institute for Social Research.
    5. Torben M. Andersen & Giuseppe Bertola & John Driffill & Harold James & Hans-Werner Sinn & Jan-Egbert Sturm & Branko Uroševic, 2016. "Chapter 3: Tuning Secondary Education," EEAG Report on the European Economy, CESifo, vol. 0, pages 70-84, February.
    6. Nina Guyon & Eric Maurin & Sandra McNally, 2012. "The Effect of Tracking Students by Ability into Different Schools: A Natural Experiment," Journal of Human Resources, University of Wisconsin Press, vol. 47(3), pages 684-721.
    7. Ludger Wößmann, 2009. "International Evidence on School Tracking: A Review," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 7(1), pages 26-34, 04.
    8. Stephen Machin & Kjell G. Salvanes & Panu Pelkonen, 2012. "Education And Mobility," Journal of the European Economic Association, European Economic Association, vol. 10(2), pages 417-450, April.
    9. repec:ces:ifodic:v:7:y:2009:i:1:p:14567020 is not listed on IDEAS
    10. Sari Pekkala Kerr & Tuomas Pekkarinen & Roope Uusitalo, 2013. "School Tracking and Development of Cognitive Skills," Journal of Labor Economics, University of Chicago Press, vol. 31(3), pages 577-602.
    11. Volker Meier & Gabriela Schütz, 2007. "The Economics of Tracking and Non-Tracking," ifo Working Paper Series 50, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    12. Mahmut Ozer & Matjaž Perc, 2020. "Dreams and realities of school tracking and vocational education," Palgrave Communications, Palgrave Macmillan, vol. 6(1), pages 1-7, December.
    13. Beblav�, Miroslav & Thum, Anna-Elisabeth & Veselkova, Marcela, 2011. "Education Policy and Welfare Regimes in OECD Countries: Social Stratification and Equal Opportunity in Education," CEPS Papers 6497, Centre for European Policy Studies.
    14. Gabriela Schütz & Heinrich W. Ursprung & Ludger Wößmann, 2008. "Education Policy and Equality of Opportunity," Kyklos, Wiley Blackwell, vol. 61(2), pages 279-308, May.
    15. Brian Nolan & Gosta Esping-Andersen & Christopher T. Whelan & Bertrand Maitre, 2010. "The Role of Social Institutions in Inter-Generational Mobility," Working Papers 201018, Geary Institute, University College Dublin.
    16. Björklund, Anders & Jäntti, Markus & Lindquist, Matthew J., 2009. "Family background and income during the rise of the welfare state: Brother correlations in income for Swedish men born 1932-1968," Journal of Public Economics, Elsevier, vol. 93(5-6), pages 671-680, June.
    17. Holmlund, Helena, 2006. "Intergenerational Mobility and Assortative Mating. Effects of an Educational Reform," Working Paper Series 4/2006, Stockholm University, Swedish Institute for Social Research.
    18. Ludger Woessmann, 2009. "International Evidence on School Tracking: A Review," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 7(01), pages 26-34, April.
    19. Orsetta Causa & Catherine Chapuis, 2009. "Equity in Student Achievement Across OECD Countries: An Investigation of the Role of Policies," OECD Economics Department Working Papers 708, OECD Publishing.
    20. Chenhong Peng & Paul Siu Fai Yip & Yik Wa Law, 2019. "Intergenerational Earnings Mobility and Returns to Education in Hong Kong: A Developed Society with High Economic Inequality," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 143(1), pages 133-156, May.
    21. Wenya Cheng, 2017. "The impact of parental education on children’s outcomes in China," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 15(4), pages 423-436, October.
    22. Anna Christina D'Addio, 2007. "Intergenerational Transmission of Disadvantage: Mobility or Immobility Across Generations?," OECD Social, Employment and Migration Working Papers 52, OECD Publishing.
    23. Hall, Caroline, 2009. "Does making upper secondary school more comprehensive affect dropout rates, educational attainment and earnings? Evidence from a Swedish pilot scheme," Working Paper Series 2009:9, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    24. Santavirta, Torsten, 2010. "How Large are the Effects from Temporary Changes in Family Environment: Evidence from a Child-evacuation Program during WWII," Working Paper Series 8/2010, Stockholm University, Swedish Institute for Social Research.

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    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • I20 - Health, Education, and Welfare - - Education - - - General

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