I study how transitory increases in the opportunity cost of schooling affect dropout rates and long-run outcomes. Exploiting a tax-free year in Iceland and comparing teenagers around compulsory schooling age, I document increased dropout rates and a permanent loss in educational attainment for...

We show that the widespread approach to estimate the career costs of motherhood - so- called "child penalties" - is prone to produce biased results, as it pools first-time mothers of all ages without accounting for their differences in characteristics and outcomes. We propose a novel method...