Same certificate, different education path: does it matter for earnings?

In the Dutch education system students are tracked at the age of twelve. This early tracking system has raised concerns about negative long run outcomes for students starting in low tracks. However, students in low tracks can still reach higher education by taking a longer education path: graduating subsequently in higher education levels that were previously not feasible. In this paper, using cohort data over the period 1993-2012, we first investigate which type of students typically take a longer education path. It appears that those students have on average lower test scores and come from a lower socioeconomic background. Second, we investigate whether these differences translate into earnings differences in later life. It appears that students from longer education paths earn on average the same as students that follow the shortest path. IV-estimates, using regional differences in the supply of secondary schools as an instrumental variable, confirm these findings. These results provide evidence that longer education paths are an effective instrument to increase the amount of human capital of students that start in low tracks.