Impact of Graduating with Honors on Entry Wages of Economics Majors

Salim Atay, Gunes Asik and Semih Tumen
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Salim Atay: Istanbul Technical University

No 16080, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Employers use various proxies to predict the future labor productivity levels of the job applicants. Success in school, especially in high-level coursework, is among the most widely used proxies to screen the entry-level candidates. We estimate the causal effect of graduating with honors – i.e., with a GPA of 3.00 and above out of 4.00 – on the starting wages of economics majors in Türkiye. Using comprehensive micro data on all economics majors between 2014-2018, matched with administrative records about their first jobs, we implement a regression discontinuity analysis to investigate whether there is any statistically significant jump in the starting wages at the honors-degree cutoff. We find that graduating with honors increases the wages of males, while there is no impact on females. We further document that the impact on males is almost entirely driven by the graduates of non-elite universities. In particular, graduating with an honors degree increases the entry wages of males from non-elite universities by about 4 percent, on average. We provide an explanation for these patterns using the theory of statistical discrimination. We discuss the potential reasons behind the heterogeneous signal value of graduating with honors between males versus females and elite versus non-elite university graduates.

Keywords: statistical discrimination; entry wages; economics majors; honors degree; regression discontinuity (search for similar items in EconPapers)
JEL-codes: I26 J31 J71 (search for similar items in EconPapers)
Pages: 55 pages
Date: 2023-04
New Economics Papers: this item is included in nep-ara, nep-edu and nep-lma
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Published - published in: Oxford Bulletin of Economics and Statistics, 2024, 86 (3), 606-640

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Journal Article: Impact of Graduating with Honours on Entry Wages of Economics Majors (2024)
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