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Incentives for Schools, Educational Signals and Labour Market Outcomes

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Author Info
Uschi Backes-Gellner () (Institute for Strategy and Business Economics, University of Zurich)
Stephan Veen () (Institute for Strategy and Business Economics, University of Zurich)

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Abstract

Central exams have been discussed as an incentive to improve educational outcomes. In our paper we study the impact of central exams on labor market outcomes. We explain the quality choice of schools under central and non-central exams and model the resulting students’ schooling decisions and employers’ wage decisions. We use the German Abitur and the variation among the German federal states with respect to central exams as a quasi experimental design. We expect the ratio of Abitur holders to increase in states without central exams and their wage premiums to decrease at the same time. In states with central exams these effects should not occur. We test our implications with official statistics on education and with the GSOEP. The first two implications are born out in the data. Finally, explanations and policy recommendations are discussed.

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File URL: http://www.isu.uzh.ch/static/ISU_WPS/61_ISU_full.pdf
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Publisher Info
Paper provided by University of Zurich, Institute for Strategy and Business Economics (ISU) in its series Working Papers with number 0061.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 40 pages
Date of creation: Jun 2006
Date of revision: Jun 2006
Handle: RePEc:iso:wpaper:0061

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Related research
Keywords: Educational Economics; School choice; Incentives for Schools; Central Exams; Economic impact; Labor Market Outcome;

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Find related papers by JEL classification:
M51 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Firm Employment Decisions; Promotions
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. John H. Tyler & Richard J. Murnane & John B. Willett, 2000. "Estimating The Labor Market Signaling Value Of The GED," The Quarterly Journal of Economics, MIT Press, vol. 115(2), pages 431-468, May. [Downloadable!] (restricted)
  2. Botelho, Anabela & Pinto, Ligia Costa, 2004. "Students' expectations of the economic returns to college education: results of a controlled experiment," Economics of Education Review, Elsevier, vol. 23(6), pages 645-653, December. [Downloadable!] (restricted)
  3. Webbink, Dinand & Hartog, Joop, 2004. "Can students predict starting salaries? Yes!," Economics of Education Review, Elsevier, vol. 23(2), pages 103-113, April. [Downloadable!] (restricted)
  4. Giorgio Brunello & Claudio Lucifora & Rudolf Winter-Ebmer, 2004. "The Wage Expectations of European Business and Economics Students," Journal of Human Resources, University of Wisconsin Press, vol. 39(4). [Downloadable!] (restricted)
  5. Miller, Paul W. & Mulvey, Charles & Martin, Nick, 2004. "A test of the sorting model of education in Australia," Economics of Education Review, Elsevier, vol. 23(5), pages 473-482, October. [Downloadable!] (restricted)
    Other versions:
  6. Costrell, Robert M, 1994. "A Simple Model of Educational Standards," American Economic Review, American Economic Association, vol. 84(4), pages 956-71, September. [Downloadable!] (restricted)
  7. Effinger, M.R. & Polborn, M.K., 1997. "A Model of Vertically Differenciated Education," Papers 97.469, Toulouse - GREMAQ.
    Other versions:
  8. Hendrik Jürges & Kerstin Schneider, 2004. "International Differences in Student Achievement: An Economic Perspective," German Economic Review, Blackwell Publishing, vol. 5(3), pages 357-380, 08. [Downloadable!] (restricted)
  9. Ludger Woessmann, 2004. "The Effect Heterogeneity of Central Exams: Evidence from TIMSS, TIMSS-Repeat and PISA," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  10. Hendrik Jürges & Kerstin Schneider, 2005. "Dynamische Lohneffekte beruflicher Weiterbildung," MEA discussion paper series 05092, Mannheim Research Institute for the Economics of Aging (MEA), University of Mannheim. [Downloadable!]
    Other versions:
  11. Weiss, Andrew, 1995. "Human Capital vs. Signalling Explanations of Wages," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 133-54, Fall. [Downloadable!] (restricted)
  12. Bishop, J., 1997. "The Effect of national Standards and Curriculum-Based Exams on Achievement," Papers 97-01, Cornell - Center for Advanced Human Resource Studies.
  13. Wikstrom, Christina & Wikstrom, Magnus, 2005. "Grade inflation and school competition: an empirical analysis based on the Swedish upper secondary schools," Economics of Education Review, Elsevier, vol. 24(3), pages 309-322, June. [Downloadable!] (restricted)
  14. Bishop, John H, 1997. "The Effect of National Standards and Curriculum-Based Exams on Achievement," American Economic Review, American Economic Association, vol. 87(2), pages 260-64, May. [Downloadable!] (restricted)
  15. Spence, A Michael, 1973. "Job Market Signaling," The Quarterly Journal of Economics, MIT Press, vol. 87(3), pages 355-74, August. [Downloadable!] (restricted)
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