Educational Reform and Labor Market Outcomes: the Case of Argentina’s Ley Federal de Educación

In 1993 the Argentine Congress passed a law (Ley Federal de Educación, LFE henceforth) aimed at changing some important characteristics of the educational system. Chief among them, were an extension in the years of compulsory education and a change in the structure of educational curricula. While in the previous system a child was obliged to attend seven years of primary school, under the new legislation compulsory educational level was extended to nine years. 

By increasing the obligatory number of years of education, the government sought to force mostly poor children to increase their human capital accumulation and induce some of them to continue studying in the secondary level and hopefully into college. Youths with more education are expected to perform better in the labor market, and hence have a lower probability of falling into poverty. While there is well-established evidence on the relationship of time spent at school and improvements in the labor market for developed countries, evidence for developing countries is much more scarce (Duflo, 2001, Galiani et al, 2007, Madeira, 2005, Rodriguez, 2005). 

In this paper we evaluate the impact of the LFE on several educational and labor outcomes by exploiting the regional heterogeneity in the timing of the reform. Argentina is a federal country where primary and secondary public education are administered and financed at the provincial level. Although the LFE was a federal law to be complied with in all provinces, there was flexibility for state governments to decide on the timing of the reform. In some provinces the reform was quickly implemented after the LFE was passed; in others, the pace of the changes was slower. In fact, in some districts many central aspects of the reform were never implemented.

Taking advantage of this source of variation in the exposition to the “treatment”, we study the impact on different educational and labor market outcomes. In particular, we are interested in evaluating whether impoverished youngsters who were required to attend two additional years of schooling were more likely to finish high school, and whether they performed better in the labor market.  

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