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A Student’s Dilemma: Is There a Traoff-off Between a Higher Salary or Higher GPA

Timothy Diette () and Manu Raghav ()

No 2014-01, Working Papers from DePauw University, Department of Economics and Management

Abstract: While students typically want to earn high grades in college, they also, and perhaps even more so, want to earn high salaries after graduating college. In this paper, we explore whether there is a relationship between average grades earned in classes and the future salaries earned by graduates with the major associated with that course. Using student level data from a selective private liberal arts college, we find an inverse relationship between grades in courses offered by different departments and the national average mid-career salaries of college graduates from these majors. This suggests students face a trade-off between current grades while in college versus higher expected earnings in the future. Furthermore, students with low Math SAT scores are likely to get much worse grades in majors with higher salaries and students with low Verbal SAT scores are likely to get higher grades in majors with higher salaries, even after controlling for whether the individual is an international student. Finally, the advantage that females have over males in average course grade diminishes significantly in majors with higher salaries.

Keywords: Grades; Earnings. (search for similar items in EconPapers)
JEL-codes: A22 I21 J31 (search for similar items in EconPapers)
Date: 2014-12
New Economics Papers: this item is included in nep-edu
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