The Impact of Compulsory Schooling on Hourly Wage: Evidence From the 1999 Education Reform in Poland

Background: In 1999, an education reform was implemented in Poland, which added 1 year to the shortest available educational path-that of basic vocational education. Under the new system, students choosing this path receive one additional year of general education. According to the authors of the reform, this should improve the students' position in the labor market, as a shortage of general skills was identified as the main deficit of basic vocational school leavers prior to the reform. Purpose: The study assesses the impact of the 1999 reform on the hourly wage of individuals who completed formal education after obtaining a basic vocational school certificate. Methods: The analysis is based on individual data from the Polish Labor Force Survey for the years 2001-2016. As the education reform was implemented simultaneously across the country, a regression discontinuity design is used to assess its impact. Results and Conclusions: The study finds that one additional year of general education has led to a 13% increase in the hourly wages of individuals who completed basic vocational schools. This effect is higher than those reported in studies for other countries where the wage premium is typically found to be under 10%. This may be because the extension of compulsory schooling in Poland affected individuals with relatively low general skills and abilities.