The Long-Term Effects of Educational Policies

On Monday 31 March 2025 Daniel Vasconcellos Archer Duque will hold a trial lecture on a prescribed topic and defend his thesis for the PhD degree at NHH.

This dissertation addresses questions about the long run effects of educational policies by examining how school funding, local government incentives, and student incentives shape individuals’ educational trajectories and later labor market outcomes. In broad terms, these policies influence everything from how resources are allocated to how students decide which courses to pursue, ultimately affecting economic opportunities and social mobility.

Chapter 1 investigates how a mid-1980s reform in Norway, which introduced an intergovernmental funding shock, impacted students’ adult earnings and educational attainment. Even in a high-spending environment, additional school funding generated significant long-term returns, particularly for children from lower socioeconomic backgrounds. This underscores the potential for well-targeted resource increases to enhance both equity and efficiency in education.

Chapter 2 focuses on how changes in external incentives for high school course choices affect long-term outcomes. A 2006 policy that reduced bonus points for rigorous STEM courses prompted students to switch to easier classes, resulting in marginal grade improvements but lower overall college admission scores. This shift led to weaker outcomes in higher education and diminished earnings by age 35, highlighting how policies that alter academic incentives can have lasting consequences for students’ career paths.

Chapter 3 examines a Norwegian funding reform that replaced earmarked grants with more flexible needs-based grants. Municipalities that gained greater autonomy responded by reallocating resources through measures such as school closures and larger class sizes, paradoxically boosting long-term cognitive and earnings outcomes—albeit not uniformly. Students from more advantaged backgrounds benefited the most, revealing the risk that flexibility can widen existing inequalities.

Taken together, these findings emphasize that educational policies have powerful and enduring effects on individual life courses. By carefully balancing efficiency and equity considerations, policymakers can design strategies that not only improve student outcomes but also foster long-term economic prosperity.