Sheepskin Effects in the Returns to Education

Hungerford, Thomas L.; Solon, Gary

doi:10.2307/1937919

Cited by 329 publications

(254 citation statements)

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“…While the assumptions necessary to identify this model are fairly strong, they are considerably weaker than those made by past work (e.g. education is treated as exogenous conditional on observable characteristics) studying sheepskin effects (Hungerford and Solon, 1987;Kane and Rouse, 1995;Jaeger and Page, 1996;Liu et al, 2015). We find suggestive evidence that college provides a large sheepskin effect, though our estimates are imprecisely estimated which prevents us from drawing strong conclusions.…”

Section: Introductionmentioning

confidence: 60%

The Returns to College Persistence for Marginal Students: Regression Discontinuity Evidence from University Dismissal Policies

Ost

Pan

Webber

2018

Journal of Labor Economics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. We estimate the returns to college using administrative data on college enrollment matched to administrative data on weekly earnings. Utilizing the fact that colleges dismiss lowperforming students based on exact GPA cutoffs, we use a regression discontinuity design to estimate the earnings impacts of college. Dismissed students are permitted to apply for readmission, but since relatively few do so, these students end up completing fewer years of school and are approximately 10 percentage points less likely to graduate college. Our estimates suggest that low-performing students (on the margin of college dismissal) derive substantial earnings benefits from college.JEL Classification: I21, I23, I26

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Section: Introductionmentioning

confidence: 60%

The Returns to College Persistence for Marginal Students: Regression Discontinuity Evidence from University Dismissal Policies

Ost

Pan

Webber

2018

Journal of Labor Economics

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“…This hypothesis has come to be known as the "sheepskin effect" -the existence of wage premiums for fulfilling the final years of elementary school, high school, or college. Hungerford and Solon (1987) and Belman and Heywood (1991) augment a standard earnings function like (1) with variables to capture non-linearities at 8, 12, or 16 years of education. These authors find some evidence of non-linearity, especially around the 16th year of schooling (corresponding to college graduation), s Park (1994) analyzed a large sample of CPS data and concluded that most of the apparent non-linearity at 16 years of education arises from the relatively small difference in earnings between individuals with 14 and 15 years of schooling (i.e., an exceptionally low return to the 15th year of schooling, rather than an 6 In fact, the education coefficient in any statistical model of wages (or earnings) is gener~ly referred to as the "return to education", regardless of what other control variables are included in the model.…”

Section: Measurement Of Educationmentioning

confidence: 99%

The Causal Effect of Education on Earnings

Card

1999

Handbook of Labor Economics

2,332

101

2,138

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“…Participants in work related training do differ from the other groups of clients in terms of relevant background characteristics and although signalling theory does not rule our 19 See for instance Cohn, Kiker and Mendes De Oliveira (1987), Hungerford and Solon (1987), Belman and Heywood (1997) and Kroch and Sjoblom (1999) for empirical tests of education as human capital or signal. Based on these studies, signalling theory seems to lack decisive empirical support.…”

Section: Discussionmentioning

confidence: 99%