High-School Dropouts: Cutting losses or just missing out?


This paper examines whether education is a valuable investment for middle school students in the bottom decile of achievement in the context of the Dominican Republic, currently the lowest scoring country on the international PISA tests. For students struggling academically, the potential returns to education may appear small compared to the immediate wages earned in the labor market. We estimate the value of years of secondary education and high-school completion for low-performing students by exploiting the passing cutoffs on the eighth and twelfth grade national exams. We find that students who barely pass the exam in eighth grade complete more years of education, are more likely to enroll in college and experience higher earnings. Similar results are found for those who marginally pass the high-school exit exam. A broad implication of these facts is that education has large and positive returns even for the lowest part of the ability distribution.

  • Coauthors: Nano Barahona, Sebastian Otero, and Christina Kent
  • Date: 2018
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