Sheepskin effects and heterogenous wage-setting behaviour: Evidence from Mozambique

David Jaeger and Sam Jones

No wp-2024-5, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: Using a unique panel survey of final-year undergraduates at six of the largest universities in Mozambique, we study the wage premium associated with completing an undergraduate degree. Conditional on a very rich set of controls, including pre-degree earnings, objective measures of ability, and academic performance, we find heterogeneity in 'sheepskin effects' across different kinds of firms. We propose a simple model of wage-setting in which productivity is only partially observable in some firms and fully observable in others.

Keywords: Returns to education; Wages; Productivity; Mozambique; Wage premium (search for similar items in EconPapers)
Date: 2024
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