DOES RAISING THE SCHOOL LEAVING AGE REDUCE TEACHER EFFORT? EVIDENCE FROM A POLICY EXPERIMENT

This paper examines the effect of an increase in the compulsory school leaving age on a measure of high school teachers' effort. Differences‐in‐Differences estimates using count data methods demonstrate that the policy led to teachers increasing their hours of sickness absence by roughly 15%. This result implies that raising the compulsory school leaving age reduces teaching inputs, and hence schooling quality. A policy implication is that these laws should be coupled with measures to compensate teachers for the additional disutility. This also suggests that instrumental variable estimates of returns to education that utilize these changes for identification may be downwardly biased. (JEL J22, J38)