IZA DP No. 2357: Is there a Causal Effect of High School Math on Labor Market Outcomes?
revised version published in: Journal of Human Resources, 2009, 44 (1), 171-198
Outsourcing of jobs to low-wage countries has increased the focus on the accumulation of skills – such as Math skills – in high-wage countries. In this paper, we exploit a high school pilot scheme to identify the causal effect of advanced high school Math on labor market outcomes. The pilot scheme reduced the costs of choosing advanced Math because it allowed for at more flexible combination of Math with other courses. We find clear evidence of a causal relationship between Math and earnings for the students who are induced to choose Math after being exposed to the pilot scheme. The effect partly stems from the fact that these students end up with higher education.