Using detailed Norwegian data on earnings and education histories, we
estimate a dynamic structural model of schooling and work decisions that
captures our data's rich patterns over the life-cycle. We validate the model
against variation in schooling choices induced by a compulsory schooling
reform. Our approach allows us to estimate the ex-ante returns to different
schooling tracks at different stages of the life-cycle and quantify the
contribution of option values. We find substantial heterogeneity in returns and
establish crucial roles for option values and re-enrollment in determining
schooling choices and the impact of schooling policies