The Effects of School Term Length on Education and Earnings: Evidence from a Regression Discontinuity Design

This paper examines the effects of a longer school year in Indonesia on grade repetition, educational attainment, employability, and earnings. I exploit an arbitrary rule that assigned students to a longer school year in Indonesia in 1978-1979, which fits a fuzzy regression discontinuity design. I find the longer school year decreases the probability of grade repetition and increases educational attainment. It also increases the probability of working in formal sectors and wages later in life. Moreover, there is some evidence that some effects of the longer school year are larger for females and for individuals who grew up in rural areas.