A large scale experiment: wages and educational expansion in France

Pre-print, Working paper: We evaluate the wage impact of the strong and rapid increase in schooling levels experienced by the cohorts born after WWII in France. In order to identify the causal effect of education, we exploit the fact that the small group of people graduating from elite education (Grandes Ecoles) remained stable, while the rest of the system experienced tremendous transformation. This provides a well defined control group. Using large scale labor force surveys for the 1990's, we find that the cohorts that received more education have a lower wage gap, relative to Grandes Ecoles. We show that such a large scale experiment measures a social return to schooling even in the presence of signaling, whereas strategies based on quasi-experiments are not necessarily robust to signaling. Our instrumental variable estimation finds returns to schooling very similar to the rest of the literature, which is a strong case against the signaling hypothesis.

Author(s)

Marc Gurgand, Eric Maurin

Date of publication
  • 2007
Keywords JEL
I2
Keywords
  • Education
  • Returns to schooling
  • Natural experiment
  • Signaling
Internal reference
  • PSE Working Papers n°2007-21
Version
  • 1