Seminar: Staring early or starting late: the effect of relative cohort age on academic achievements, labor market outcomes and family formation

Every school system inevitably places pupils into cohorts. This creates an age difference between the older and younger students. In the Netherlands students go to school as soon as they turn four. Cohorts are created upon entrance in grade 1 (groep 3). For a long period Dutch schools used being born before October 1 as cut-off rule. We investigate whether relative cohort age affects long-term educational outcomes and earnings, using a regression discontinuity design and population wide registry data. In line with previous findings, older students perform better at tests in primary school. This has substantial effects on track placement in secondary schools, which persist during the first years of secondary education. There is, however, no effect on the highest attained level of education and only a limited effect on time in school. As a result, relatively younger student on average complete education at a younger age. This translates into a positive earnings effect up to 30 years after completing education. Relatively younger students also get married and start having children earlier. Our results point to a trade-off between a substantial earnings gain and the loss of one year of childhood.