This paper identifies the causal effect of an educational reform implemented in Croatia in 1975/76 and 1977/78 on educational and labor market outcomes. High-school education was split into two phases which resulted in reduced tracking and extended general curriculum for pupils attending vocational training. Exploiting the rules on elementary school entry and timing of the reform, we use a regression discontinuity design and pooled Labor Force Surveys 2000–2012 to analyze the effect of the reform on educational attainment and labor market outcomes. We find that the reform, on average, reduced the probability of having university education, which we contribute to attaching professional context to once purely academic and general high-school programs. We also observe heterogeneity of the effects across gender, as for males we find that the probability of finishing high school decreased, while for the females we do not observe any adverse effects, only an increase in the probability of having some university education. We explain this heterogeneity with different selection into schooling for males and females. Reform did not positively affect individuals’ labor market perspectives; therefore, we conclude that the observed general-vocational wage differential is mainly driven by self-selection into the type of high school.
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