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The Value of Postsecondary Credentials in the Labor Market: An Experimental Study

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  • David J. Deming
  • Noam Yuchtman
  • Amira Abulafi
  • Claudia Goldin
  • Lawrence F. Katz

Abstract

We study employers' perceptions of the value of postsecondary degrees using a field experiment. We randomly assign the sector and selectivity of institutions to fictitious resumes and apply to real vacancy postings for business and health jobs on a large online job board. We find that a business bachelor's degree from a for-profit online institution is 22 percent less likely to receive a callback than one from a nonselective public institution. In applications to health jobs, we find that for-profit credentials receive fewer callbacks unless the job requires an external quality indicator such as an occupational license. (JEL I23, I26, J24, J44, J63, M51)

Suggested Citation

  • David J. Deming & Noam Yuchtman & Amira Abulafi & Claudia Goldin & Lawrence F. Katz, 2016. "The Value of Postsecondary Credentials in the Labor Market: An Experimental Study," American Economic Review, American Economic Association, vol. 106(3), pages 778-806, March.
  • Handle: RePEc:aea:aecrev:v:106:y:2016:i:3:p:778-806 Note: DOI: 10.1257/aer.20141757
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    Cited by:

    1. Stephanie R. Cellini & Rajeev Darolia & Lesley J. Turner, 2016. "Where Do Students Go when For-Profit Colleges Lose Federal Aid?," NBER Working Papers 22967, National Bureau of Economic Research, Inc.
    2. Nunley, John M. & Pugh, Adam & Romero, Nicholas & Seals, R. Alan, 2016. "College major, internship experience, and employment opportunities: Estimates from a résumé audit," Labour Economics, Elsevier, vol. 38(C), pages 37-46.
    3. Christopher Jepsen & Peter Mueser & Kyung-Seong Jeon, 2016. "The Benefits of Alternatives to Conventional College: Labor-Market Returns to Proprietary Schooling," Working Papers 1607, Department of Economics, University of Missouri.
    4. Chen, Roy & Chen, Yan & Liu, Yang & Mei, Qiaozhu, 2017. "Does team competition increase pro-social lending? Evidence from online microfinance," Games and Economic Behavior, Elsevier, vol. 101(C), pages 311-333.
    5. Joshua Goodman & Julia Melkers & Amanda Pallais, 2016. "Can Online Delivery Increase Access to Education?," NBER Working Papers 22754, National Bureau of Economic Research, Inc.
    6. Hinrichs, Peter, 2014. "What Kind of Teachers Are Schools Looking For? Evidence from a Randomized Field Experiment," Working Paper 1436, Federal Reserve Bank of Cleveland.
    7. repec:iza:izawol:journl:y:2017:n:413 is not listed on IDEAS
    8. Boyd-Swan, Casey & Herbst, Chris M., 2017. "The Demand for Teacher Characteristics in the Market for Child Care: Evidence from a Field Experiment," IZA Discussion Papers 10702, Institute for the Study of Labor (IZA).
    9. Alain Cohn & Michel André Maréchal & Frédéric Schneider & Roberto A. Weber, 2015. "Job history, work attitude, and employability," ECON - Working Papers 210, Department of Economics - University of Zurich, revised Apr 2016.
    10. Gee, Laura Katherine, 2016. "The More You Know: Information Effects on Job Application Rates in a Large Field Experiment," IZA Discussion Papers 10372, Institute for the Study of Labor (IZA).
    11. Rishi Ahuja & Ronan C. Lyons, 2017. "The Silent Treatment: LGBT Discrimination in the Sharing Economy," Trinity Economics Papers tep1917, Trinity College Dublin, Department of Economics.
    12. W. Robert Reed, 2017. "Replication in labor economics," IZA World of Labor, Institute for the Study of Labor (IZA), pages 413-413.
    13. Rajeev Darolia, 2015. "Messengers of Bad News or Bad Apples? Student Debt and College Accountability," Education Finance and Policy, MIT Press, pages 277-299.
    14. John M. Nunley & Adam Pugh & Nicholas Romero & Richard Alan Seals, Jr., 2015. "Unemployment, Underemployment, and Employment Opportunities: Results from a Correspondence Audit," Auburn Economics Working Paper Series auwp2015-13, Department of Economics, Auburn University.
    15. Armona, Luis & Chakrabarti, Rajashri & Lovenheim, Michael, 2017. "How does for-profit college attendance affect student loans, defaults, and earnings?," Staff Reports 811, Federal Reserve Bank of New York.
    16. Beam, Emily A. & Hyman, Joshua & Theoharides, Caroline, 2017. "The Relative Returns to Education, Experience, and Attractiveness for Young Workers," IZA Discussion Papers 10537, Institute for the Study of Labor (IZA).
    17. David J. Deming & Claudia Goldin & Lawrence F. Katz & Noam Yuchtman, 2015. "Can Online Learning Bend the Higher Education Cost Curve?," American Economic Review, American Economic Association, pages 496-501.

    More about this item

    JEL classification:

    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions

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