How does reducing years of compulsory schooling affect education and labor market outcomes in a developing country?

How does reducing years of compulsory schooling affect education and labor market outcomes in a developing country?

At the end of the 1980’s, Egypt introduced a policy change to its pre-university education system where the years of primary education decreased from six to five, reducing the overall years of compulsory education from nine to eight. Using data from the Egypt Labor Market Panel Survey (ELMPS) in 2006 and 2012, we study the effect of this educational reform on several education and labor market outcomes. We find that the policy had positive effects on educational outcomes as it significantly increased the probability of finishing compulsory education and raised the overall years of education. However, the policy significantly postponed the age of entering the labor market, increased the time between completing education and getting the first job, and reduced the probability of the first job being paid. The effects of the policy on both education and labor market outcomes were more pronounced for males than for females.

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