SNS Research Brief 64. The long-run labor market effects of more education

SNS Research Brief 2020.08.04
SNS Research Brief 64. The long-run labor market effects of more education. English summary 34.2 KB PDF

A school reform during the 1930s and 1940s, through which the annual school term was extended, had large effects on income later in life. This is shown by three economists in a new report from SNS. Martin Fischer, Martin Karlsson, and Therese Nilsson find a causal relationship between more instruction time in primary school and better outcomes on the labour market. The effects were largest for those who had longer terms during the first years of school. The authors recommend increasing term length for younger students.

Fischer, Karlsson, and Nilsson evaluate the effects of two parallel school reforms, where one extended school terms and the other added a mandatory school year at the end of schooling. The report shows that longer terms have significantly larger effects on labour market outcomes than an added school year at the end of schooling. The results are driven almost exclusively by women.

»Girls who had longer terms had, on average, 9.5 percent higher income and 3.7 percent higher pensions later in life. An added mandatory school year at the end of schooling had significantly smaller effects,« says Martin Fischer.

The school term extension also resulted in women increasing their workforce participation and to a greater extent getting qualified jobs that required precisely the basic reading, writing, and arithmetic skills taught in primary school. One explanation for the effect noted for women could be that their income and employment rates started from low levels, and that the results thus partially reflect a decreased gap in relation to men.

The positive effects can be traced to term extensions implemented during the first four years of primary school. The results are in line with previous research, showing the importance of early interventions to create equal opportunities in life.

Today, almost all jobs require a certain level of fundamental knowledge. Still, the PISA surveys show that, e.g., reading performance has stagnated or decreased among students in countries like Sweden, the Netherlands, and Finland in the last decades.

»Our results are highly relevant today, as we see large disparities in learning outcomes. We show that a few more weeks of schooling each year in primary school can make a large difference. It is hard to compensate for poor basic skills later in life,« says Therese Nilsson.

Based on these results, the authors suggest that instructional time for younger students should be increased.

About the report

The authors use a unique historical data material to study the effects of two school reforms implemented in Sweden 70–80 years ago. One reform increased time in education by extending the school terms by an amount corresponding to an additional year of schooling. The second reform extended mandatory schooling by one year at the end of schooling, when students were 13 years old.


Martin Fischer, postdoc, Karolinska Institutet and the Research Institute of Industrial Economics

Martin Karlsson, Professor of Economics, University of Duisburg-Essen

Therese Nilsson, Associate Professor in Economics, Lund University and the Research Institute of Industrial Economics