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The causal effect of an extra year of schooling on skills and knowledge in Latin America. Evidence from PISA

Abstract In this paper, we estimate the causal effect of an extra year of schooling on mathematics performance for seven Latin American countries based on PISA 2012. To that end we exploit exogenous variation in students’ birthdates around the school entry cut-off date using both sharp and fuzzy Regression Discontinuity designs. We find strong effects of an extra year of schooling in most countries, which amount to a 30% increase in PISA test scores in Brazil, 18% in Uruguay, 7% in Argentina and 6% in Costa Rica. These effects differ from the typical estimates obtained from simple regressions or multilevel models and are large enough to allow 15-year-old students to reach higher proficiency levels, suggesting significant potential gains of reducing dropout rates in the region. Finally, we stress the importance of taking into account the effects of school entry cut-off dates on PISA samples to avoid making unfair international comparisons.