# Labor Market Outcomes and Early Schooling: Evidence from School Entry Policies Using Exact Date of Birth

## TL;DR

This study uses a natural experiment in Brazil to show that an extra year of early schooling significantly boosts adult labor income and college attainment, with robust evidence supporting causality.

## Contribution

It provides causal evidence on the long-term economic benefits of early schooling policies using a regression discontinuity approach.

## Key findings

- An additional year of schooling increases labor income by 25.8%.
- A 9.6% higher probability of college degree attainment at cutoff.
- A 201% increase in labor income associated with college premium.

## Abstract

We use a rich, census-like Brazilian dataset containing information on spatial mobility, schooling, and income in which we can link children to parents to assess the impact of early education on several labor market outcomes. Brazilian public primary schools admit children up to one year younger than the national minimum age to enter school if their birthday is before an arbitrary threshold, causing an exogenous variation in schooling at adulthood. Using a Regression Discontinuity Design, we estimate one additional year of schooling increases labor income in 25.8% - almost twice as large as estimated using mincerian models. Around this cutoff there is also a gap of 9.6% on the probability of holding a college degree in adulthood, with which we estimate the college premium and find a 201% increase in labor income. We test the robustness of our estimates using placebo variables, alternative model specifcations and McCrary Density Tests.