Abstract
The relative age effect is an established phenomenon in the literature, but estimates of its strength and duration vary. With Norwegian registry data we investigate how birth month affects earnings throughout the full course of life (20 to 68years) for all Norwegian men born during the 1940s. We compare earnings across birth month within school cohorts, and observe earnings both at given points in time (“Social age”) and at given exact ages (“Biological age”). Our findings suggest that, albeit significant earnings differences at given ages, the effects cancel out over the full course of life and leave no imprint on life earnings.
Highlights
When Norwegian children begin their first year of school in August every year, the oldest pupils in class are nearly one year older than the youngest
We find that birth month estimates over the life trajectory depend crucially on the choice of comparison group, i.e. whether we compare across birth month for individuals at the same social age or the same biological age
In order to investigate if individuals born between February and November are affected by relative age differences, we investigate birth month effects for all birth months at given age levels, employing formulas given in Eq (6)
Summary
When Norwegian children begin their first year of school in August every year, the oldest pupils in class are nearly one year older than the youngest. The age differences within a classroom imply that individuals compare themselves to – and are being compared to – peers that are at other physical and mental maturity levels This relative standing in class, referred to as the relative age effect, may affect social roles and development, such as selection of school electives and extracurricular activities and even self-esteem and aspirations that persist into adulthood.. Fourth, when comparing individuals of the same biological age, time elapsed since graduation and entry into the labor market differ This is especially important during early career years, when human capital through work experience is growing at its fastest.
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