202 - ERF W 4 P s - The Causal Impact of Education

We explain the evidence for the adverse effects of education on mental health, especially experienced by those who face higher competition in the labor market, by the lack of an increase in household income despite the longer years in school. [...] As a result of the timing of the compulsory schooling reforms, which were primarily implemented in the first half of the 20th century, evidence from the developed 4 countries focuses on a relatively older sample of individuals.1 The mean age of the adults in our study is 25, which enables us to focus on individuals at the child-bearing age and in the labor market. [...] 5 explain the low wage returns of the reform in their study by the fact that the wage-schooling locus is flat for the affected grades and the lack of a sheepskin effect. [...] The reform increased the percentage of men with a middle school diploma by 27 percent at the cutoff (from 75 percent on the left to 95 percent on the right with a 20 percentage points increase) and for women by 52 percent (from 54 percent on the left-hand side of the cutoff to 82 percent on the right-hand side with a 28 percentage points increase). [...] Our results have important policy implications by suggesting that failing to improve the efficiency of education may negatively impact mental health in the shorter term, and the working-age population’s mental health should be monitored in the labor markets following the factors that increase the degree of competition in the labor markets.