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Why Is an Elite Undergraduate Education Valuable? Evidence from Israel

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  • Kevin Lang
  • Erez Siniver

Abstract

In this paper we compare the labor market performance of Israeli students who graduated from one of the leading universities, Hebrew University (HU), with those who graduated from a professional undergraduate college, College of Management Academic Studies (COMAS). Our results support a model in which employers have good information about the quality of HU graduates and pay them according to their ability, but in which the market has relatively little information about COMAS graduates. Hence, high-skill COMAS graduates are initially treated as if they were the average COMAS graduate, who is weaker than a HU graduate, consequently earning less than UH graduates. However, over time the market differentiates among them so that after several years of experience, COMAS and HU graduates with similar entry scores have similar earnings. Our results are therefore consistent with the view that employers use education information to screen workers but that the market acquires information fairly rapidly.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 16730.

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Date of creation: Jan 2011
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Handle: RePEc:nbr:nberwo:16730

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Cited by:
  1. Suhonen, Tuomo, 2013. "Are there returns from university location in a state-funded university system?," Regional Science and Urban Economics, Elsevier, vol. 43(3), pages 465-478.
  2. Cohodes, Sarah & Goodman, Joshua, 2013. "Merit Aid, College Quality and College Completion: Massachusetts' Adams Scholarship as an In-Kind Subsidy," Working Paper Series rwp13-005, Harvard University, John F. Kennedy School of Government.
  3. Brad J. Hershbein, 2013. "Worker Signals among New College Graduates: The Role of Selectivity and GPA," Upjohn Working Papers and Journal Articles 13-190, W.E. Upjohn Institute for Employment Research.
  4. Broecke, Stijn, 2012. "University selectivity and earnings: Evidence from UK data on applications and admissions to university," Economics of Education Review, Elsevier, vol. 31(3), pages 96-107.
  5. Cohodes, Sarah & Goodman, Joshua, 2012. "First Degree Earns: The Impact of College Quality on College Completion Rates," Working Paper Series rwp12-033, Harvard University, John F. Kennedy School of Government.

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