Economic Impacts of the 1997 Compulsory Education Reform in Turkey: New Findings and Employment Analysis

Abstract

This study investigates the economic impact of Turkey's 1997 compulsory education reform, which extended mandatory schooling from five to eight years. Utilizing data from the seventh wave of the World Values Survey and employing an instrumental variable approach with Two-Stage Least Squares (2SLS) estimation, we provide new insights into the reform's outcomes. The findings reveal that the reform significantly increased educational attainment and reduced gender disparities. However, the anticipated economic benefits were limited, with higher unemployment rates and a lower likelihood of high-skilled employment among treated cohorts. Additionally, those affected by the reform reported lower perceived improvements in their standard of living compared to their parents. These results suggest that the expansion of education increased the supply of educated individuals, potentially lowering the overall value of education in the labour market.