Creating winners and losers: date of birth, relative age in school, and outcomes in childhood and adulthood

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Date and Time: 
Thursday, October 15, 2015
12:00 pm – 1:00 pm
Pablo Peña
University of Chicago

This article presents three contributions. First, we estimate the causal effect of relative age (i.e., how old a person is relative to her school classmates) on test scores for a sample of students born between 1992 and 2004 using a policy experiment that shifted four months the cutoff date for school eligibility in Mexico. We exploit three distinct sources of identification and obtain similar estimates. One year of relative age confers and advantage in test scores that ranges between 0.2 and 0.4 standard deviations. Second, using date of birth as a proxy for relative age in school in a sample of Mexican adults born between 1960 and 1980, we estimate relative-age effects in six labor and marriage market outcomes: college attainment, employment status, earnings, having employer-provided medical insurance, college attainment of the spouse, and number of children. We find significant relative-age effects in the six outcomes. Third, we present a theoretical model to show that, starting with the same relative-age effects in academic performance in childhood, wealth could magnify, attenuate or even reverse the sign of relative-age effects in adulthood outcomes. This “anything goes” theoretical result is useful in interpreting different estimates of relative-age effects in adulthood outcomes across countries. Altogether, the findings indicate that institutional features of educational systems create “winners” and “losers” in academic performance via relative age in school, ultimately affecting labor and marriage market outcomes in adulthood, although possibly to varying degrees depending on other conditions such as wealth.