Does the early bird catch the worm? Instrumental variable estimates of early educational effects of age of school entry in Germany

We estimate the effect of age of school entry on educational outcomes using two different data sets for Germany, sampling pupils at the end of primary school and in the middle of secondary school. Results are obtained based on instrumental variable estimation exploiting the exogenous variation in month of birth. We find robust and significant positive effects on educational outcomes for pupils who enter school at 7 instead of 6 years of age: test scores at the end of primary school increase by about 0.40 standard deviations and the probability to attend the highest secondary schooling track (Gymnasium) increases by about 12% points.