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Prestige Matters: Wage Premium and Value Addition in Elite Colleges

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  • Sheetal Sekhri

Abstract

This paper provides evidence that graduates of elite public institutions in India have an earnings advantage in the labor market even though attending these colleges has no discernible effect on academic outcomes. Admission to the elite public colleges is based on the scores obtained in the Senior Secondary School Examinations. I exploit this feature in a regression discontinuity design. Using administrative data on admission and college test scores and an in-depth survey, I find that the salaries of elite public college graduates are higher at the admission cutoff although the exit test scores are no different.

Suggested Citation

  • Sheetal Sekhri, 2020. "Prestige Matters: Wage Premium and Value Addition in Elite Colleges," American Economic Journal: Applied Economics, American Economic Association, vol. 12(3), pages 207-225, July.
    • Handle: RePEc:aea:aejapp:v:12:y:2020:i:3:p:207-25
    DOI: 10.1257/app.20140105
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    Cited by:

    1. Prakhov, Ilya, 2023. "Indicators of higher education quality and salaries of university graduates in Russia," International Journal of Educational Development, Elsevier, vol. 99(C).
    2. Jain, Chandan & Kashyap, Shagun & Lahoti, Rahul & Sahoo, Soham, 2023. "The impact of educated leaders on economic development: Evidence from India," Journal of Comparative Economics, Elsevier, vol. 51(3), pages 1068-1093.
    3. Choudhury, Prithwiraj & Ganguli, Ina & Gaulé, Patrick, 2023. "Top Talent, Elite Colleges, and Migration: Evidence from the Indian Institutes of Technology," Journal of Development Economics, Elsevier, vol. 164(C).
    4. Huang, Wei & Li, Teng & Pan, Yinghao & Ren, Jinyang, 2023. "Teacher characteristics and student performance: Evidence from random teacher-student assignments in China," Journal of Economic Behavior & Organization, Elsevier, vol. 214(C), pages 747-781.
    5. Azzoni, Carlos R. & Vassalo, Moisés, 2022. "A Cost-Benefit Analysis of High-Quality University Education in Brazil," TD NEREUS 1-2022, Núcleo de Economia Regional e Urbana da Universidade de São Paulo (NEREUS).
    6. Borker,Girija, 2021. "Safety First : Perceived Risk of Street Harassment and Educational Choices of Women," Policy Research Working Paper Series 9731, The World Bank.
    7. Jia, Ruixue & Li, Hongbin, 2021. "Just above the exam cutoff score: Elite college admission and wages in China," Journal of Public Economics, Elsevier, vol. 196(C).
    8. Matilde Cappelletti & Leonardo M. Giuffrida & Gabriele Rovigatti & Leonardo Maria Giuffrida, 2022. "Procuring Survival," CESifo Working Paper Series 10124, CESifo.
    9. Cecilia Machado & Germ'an Reyes & Evan Riehl, 2023. "The Direct and Spillover Effects of Large-scale Affirmative Action at an Elite Brazilian University," Papers 2305.02513, arXiv.org, revised Jun 2023.
    10. Borsi, Mihály Tamás & Valerio Mendoza, Octasiano Miguel & Comim, Flavio, 2022. "Measuring the provincial supply of higher education institutions in China," China Economic Review, Elsevier, vol. 71(C).
    11. Zachary Bleemer, 2022. "Affirmative Action, Mismatch, and Economic Mobility after California’s Proposition 209," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 137(1), pages 115-160.
    12. Fernanda Estevan & Lucas Finamor, 2022. "School closures and educational path: how the Covid-19 pandemic affected transitions to college," Papers 2210.00138, arXiv.org.
    13. Cappelletti, Matilde & Giuffrida, Leonardo M., 2021. "Procuring survival," ZEW Discussion Papers 21-093, ZEW - Leibniz Centre for European Economic Research.
    14. Altunina Anastasiia, 2022. "Study-Work Trade-off in Contests With Capacity-Constrained Students," HSE Working papers WP BRP 259/EC/2022, National Research University Higher School of Economics.
    15. Vu, Tien Manh & Yamada, Hiroyuki, 2022. "Returns to test scores in Vietnam," MPRA Paper 111714, University Library of Munich, Germany.

    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
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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