Ability, Parental Background and Education Policy: Empirical Evidence from a Social Experiment

Following the great expansion of secondary education in the United States between 1910 and 1940, Sweden was one of the first Western European countries to attempt such an expansion by increasing the years of compulsory schooling and and improving access to academic type education by abolishing early selection. The reform was preceded by a large scale area based social experiment where 25% of the contry’s municipalities were assigned to the reform. We use this assignment, together with rich individual data to evaluate this major educational interventions. Our key findings are that this reform increased the educational attainment of individuals with unskilled fathers. In addition it caused significant and large increases in the earnings of those with unskilled fathers and above median ability. ∗We thank Jerome Adda, Josh Angrist, Orazio Attanasio, Anders Björklund, Richard Blundell, Lorraine Dearden, Christian Dustmann, Jim Heckman, Guido Imbens, Mac Murray, Jan O. Jonsson, Lars-Erik Öller, Emma Rothschild, Barbara Sianesi, Chris Taber, Frank Vella, Ed Vytlacil as well as participants in the conference on evaluation of education policies at the Hebrew University and in seminars at the Universities of Chicago, Columbia, Princeton, Ume̊a, and Uppsala, the Tinbergen Institute in Amsterdam, the Trade Unions Institute for Economic Research in Stockholm and IIES at Stockholm University for comments and suggestions; Finally, we would like to thank the Department of Education, University of Gothenburg for letting us use their data. Marten Palme acknowledges financial support from the Swedish Council for Social Research. Costas Meghir acknowledges financial support from the ESRC via the CFP at the IFS and from the Centre for the Economics of Education funded by the DfEE. The usual disclaimer applies. †Institute for Fiscal Studies and Department of Economics, University College London, Gower Street, London WC1E 6BT, UK. E-mail: [email protected]. ‡Department of Economics, Stockholm University, SE-106 91 Stockholm, Sweden. E-mail: [email protected].