of education, and years of schooling) by exposure to the sanctions.<sup>60</sup> Overall, these results show that children who were more exposed to the sanction when they were of schooling age obtained fewer years of education and were less likely to enroll and complete a college program. As Panel A shows, negative consequences of the sanction are larger for children who were exposed longer to the sanctions. The years of schooling significantly decreased by 0.4 and 0.3 years among fully-exposed and early-exposed cohorts, respectively. Also, the probability of attending college significantly decreased among fully-exposed cohort by 6.1 percentage points and this effect is significantly larger than that of early-exposed cohort (1.7 percentage points). Another important concern is that affected children may just postpone completing their education and enter into college later. In this case, children would take more time to complete their degree, but still would complete it. To check for this possibility, I conduct a similar analysis for college completion and I find that longer exposure to the sanctions decreases the probability of completing college by 3.3 pp. The fully-exposed cohort (aged 16-20 in 2007) are affected by the sanctions during their high school and university education. A lower quality of schooling, lack of access to private tutoring for the university entrance exam preparation, and lack of financial resources for college can explain this larger effect. There is no significant effect on enrollment in grades 1-9 and enrollment in high school two. Although attending high school two is not mandatory, the sanctions had no effect on it perhaps because fee-free public high schools are available and/or the outside option (e.g., employment opportunities for low educated people) is not high. Also, I did not find any significant effects on completing high school two perhaps because Iranian students follow the entry age cutoff rule set by the Iranian Ministry of Education. For high school two, the minimum and maximum entry ages are 15 and 18, respectively. Also, the maximum graduation age is 20.<sup>61</sup> Also, cohort analysis results in Panel B are consistent with earlier results in Panel A.<sup>62</sup> These results are robust to the use of different bandwidths of treated cohorts. Another important concern is that affected children may return to school after the sanctions are lifted. To check for this possibility, I use the data in 2019 (the most recent available data) and find similar results (Panel B) that indicate affected children did not return to school after the sanctions were lifted. Delay entry into college is rare among boys because non-student men older than 18 years old must go for two-year military service. While there is no such restriction for girls, I did not find any evidence of postponing going to college among affected girls. Also I did not find any significant effects on returning to high school in 2019 perhaps because of the age restriction for entering and completing high school. Panel C shows that the effects are small and not significantly different from zero for fake treatment cohorts It is also helpful to understand the heterogeneity of the sanctions effects at different ages. Age plays an important role in the school enrollment decision. The crucial ages for children’s enrollment/dropout rates are at the entrance to the first grade (6 years old), high school dropout age (16 years old), and matriculation at a university (18 years old). As Table 7 shows, the economic sanctions increased the probability of dropping out of high school. The

> 60Using HIES this analysis cannot be done for family education spending because in this data the share of total education spending on each child is not observable. Also, I cannot do this analysis for each grade because in the data education levels are reported based on ISCED (less than primary, primary, lower secondary, upper secondary, 2-year tertiary vocational education, Bachelor’s, Master, and Ph.D.), thus the grades are not observable.

> 61Older people are not allowed to enroll or continue their education in high school two. Instead, they can enroll in the adult education system which is not available in all cities due to low demand. The data shows very few persons return to school as adults, and I did not find any significant change in enrollment in the adult education system.

> 62The results in Panel B are less precise because for cohort analysis a single year data is used, thus the sample size is smaller compared to that of Panel A. For example, the population of fully-exposed children (aged 16-20 in 2007) in Panel A is ten times larger than that in Panel B.

31