A question of degree: The effects of degree class on labor market outcomes

Andy Feng and Georg Graetz

Economics of Education Review, 2017, vol. 61, issue C, 140-161

Abstract: How does performance at university affect labor market outcomes? Employing a regression discontinuity design, we show that university degree class causally affects graduates’ industry, wages, and earnings. Our sample consists of students at the London School of Economics, and our data combine administrative records with the Destinations of Leavers from Higher Education survey. We estimate that receiving a First Class degree instead of an Upper Second increases the probability of working in a high-wage industry by fourteen percentage points, leads to three percent higher wages, and yields two percent higher annual salaries. For the comparison between Upper and Lower Seconds, the corresponding figures are ten, seven, and four. Effects are larger for males and graduates of math-intensive degree programs. We show that this is consistent with a model of statistical discrimination, in which employers attach more importance to the degree class signal if it is more informative about underlying ability.

Keywords: Educational economics; Human capital; Salary and wage differentials (search for similar items in EconPapers)
JEL-codes: C26 I24 J24 J31 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (41)

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Related works:
Working Paper: A Question of Degree: The Effects of Degree Class on Labor Market Outcomes (2015)
Working Paper: A Question of Degree: The Effects of Degree Class on Labor Market Outcomes (2013)
Working Paper: A question of degree: the effects of degree class on labor market outcomes (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecoedu:v:61:y:2017:i:c:p:140-161

DOI: 10.1016/j.econedurev.2017.07.003

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