THE SCHOOL LEAVING AGE: JUST A NUMBER?

Abstract

I examine the real-world effect of raising the school leaving age (SLA). This is achieved through a difference-in-differences-based methodology that uses panel data regression to exploit the variation in SLA legislation within and across states between 2006 and 2019. This study is the most recent analysis to date by a wide margin. The chosen model does not assume a linear effect with respect to age, uniquely allowing for an analysis of the differential effects of raising the school leaving age between different ages. A variety of financial, education, and crime outcomes are examined. Potential effects are analyzed from the same year when the SLA is raised to over a decade after. I find raising the SLA improves financial outcomes and education outcomes by a modest amount, but not crime outcomes. Raising the SLA has the biggest impact on poverty. The benefits of raising the SLA are most significant if the SLA is raised by two years. Raising the SLA by two years from 16 to 18 increases earnings by around $1000, a 2.7% increase; the high school graduation rate by 0.5 percentage points, a 0.5% increase; bachelor’s degree attainment by 0.4 percentage points, a 2.4% increase; master’s degree or higher attainment rate by 0.5 percentage points, a 4.6% increase; and decreases the poverty rate by around 1 percentage point, an 8% decrease. Raising the SLA by one year to 18 does not result in significant benefits. Initial results for raising the SLA to 19 years of age are also examined and show a benefit for financial outcomes.