IDEAS home Printed from https://ideas.repec.org/a/zbw/espost/320728.html
   My bibliography  Save this article

What does successful university graduation signal to employers? A factorial survey experiment on sheepskin effects

Author

Listed:
  • Neugebauer, Martin
  • Heisig, Jan Paul
  • Bol, Thijs

Abstract

Higher education graduates enjoy substantial labour market advantages over similar individuals who attended higher education but did not complete a degree. We use a hiring survey experiment with 335 German employers to explore possible explanations for these ‘sheepskin effects’, while addressing concerns about unobserved confounding in observational studies. Across 2680 hypothetical job applicants, employers were nearly 1.8 times more likely to invite graduates for an interview than otherwise identical non-completers and were also willing to pay graduates substantially higher starting salaries. Using a unique survey module on employers’ perceptions, we show that the average employer perceives degree-holders to outperform non-completers in terms of occupation-specific and non-cognitive skills but not in terms of general cognitive skills. These employer perceptions predict hypothetical hiring behaviour in that those who view graduates more favourably showed a stronger preference for this group in the survey experiment. We discuss these results in relation to signalling, human capital, and credentialism explanations of sheepskin effects.

Suggested Citation

  • Neugebauer, Martin & Heisig, Jan Paul & Bol, Thijs, 2025. "What does successful university graduation signal to employers? A factorial survey experiment on sheepskin effects," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 0, pages 1-18.
    • Handle: RePEc:zbw:espost:320728
    DOI: 10.1093/esr/jcaf028
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/320728/1/Full-text-article-Neugebauer-et-al-What-does-successful-university.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.1093/esr/jcaf028?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Ralph Stinebrickner & Todd Stinebrickner, 2014. "Academic Performance and College Dropout: Using Longitudinal Expectations Data to Estimate a Learning Model," Journal of Labor Economics, University of Chicago Press, vol. 32(3), pages 601-644.
    2. Humburg, Martin & van der Velden, Rolf, 2015. "Skills and the graduate recruitment process: Evidence from two discrete choice experiments," Economics of Education Review, Elsevier, vol. 49(C), pages 24-41.
    3. Nadine Ketel & Edwin Leuven & Hessel Oosterbeek & Bas van der Klaauw, 2016. "The Returns to Medical School: Evidence from Admission Lotteries," American Economic Journal: Applied Economics, American Economic Association, vol. 8(2), pages 225-254, April.
    4. Gary S. Becker, 1964. "Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, First Edition," NBER Books, National Bureau of Economic Research, Inc, number beck-5, July.
    5. David Deming & Lisa B. Kahn, 2018. "Skill Requirements across Firms and Labor Markets: Evidence from Job Postings for Professionals," Journal of Labor Economics, University of Chicago Press, vol. 36(S1), pages 337-369.
    6. Dan Su & Peter M. Steiner, 2020. "An Evaluation of Experimental Designs for Constructing Vignette Sets in Factorial Surveys," Sociological Methods & Research, , vol. 49(2), pages 455-497, May.
    7. Peter Arcidiacono & Patrick Bayer & Aurel Hizmo, 2010. "Beyond Signaling and Human Capital: Education and the Revelation of Ability," American Economic Journal: Applied Economics, American Economic Association, vol. 2(4), pages 76-104, October.
    8. Piopiunik, Marc & Schwerdt, Guido & Simon, Lisa & Woessmann, Ludger, 2020. "Skills, signals, and employability: An experimental investigation," European Economic Review, Elsevier, vol. 123(C).
    9. Belman, Dale & Heywood, John S, 1997. "Sheepskin Effects by Cohort: Implications of Job Matching in a Signaling Model," Oxford Economic Papers, Oxford University Press, vol. 49(4), pages 623-637, October.
    10. Jhon James Mora & Juan Muro, 2008. "Sheepskin effects by cohorts in Colombia," International Journal of Manpower, Emerald Group Publishing Limited, vol. 29(2), pages 111-121, May.
    11. Heisig, Jan Paul & Schaeffer, Merlin, 2019. "Why You Should Always Include a Random Slope for the Lower-Level Variable Involved in a Cross-Level Interaction," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 35(2), pages 258-279.
    12. Matt S. Giani & Paul Attewell & David Walling, 2020. "The Value of an Incomplete Degree: Heterogeneity in the Labor Market Benefits of College Non-Completion," The Journal of Higher Education, Taylor & Francis Journals, vol. 91(4), pages 514-539, June.
    13. Jhon James Mora & Juan Muro, 2008. "Sheepskin effects by cohorts in Colombia," International Journal of Manpower, Emerald Group Publishing Limited, vol. 29(2), pages 111-121, May.
    14. Alfonso Flores-Lagunes & Audrey Light, 2010. "Interpreting Degree Effects in the Returns to Education," Journal of Human Resources, University of Wisconsin Press, vol. 45(2).
    15. Empar Pons & Juan Blanco, 2005. "Sheepskin Effects in the Spanish Labour Market: A Public-Private Sector Analysis," Education Economics, Taylor & Francis Journals, vol. 13(3), pages 331-347.
    16. Mincer, Jacob, 1970. "The Distribution of Labor Incomes: A Survey with Special Reference to the Human Capital Approach," Journal of Economic Literature, American Economic Association, vol. 8(1), pages 1-26, March.
    17. Patrick J. Bayer & Peter Arcidiacono & Aurel Hizmo, 2010. "Web Appendix: Beyond Signaling and Human Capital: Education and the Revelation of Ability," Working Papers 10-52, Duke University, Department of Economics.
    18. Hungerford, Thomas & Solon, Gary, 1987. "Sheepskin Effects in the Returns to Education," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 175-177, February.
    19. Hainmueller, Jens & Mummolo, Jonathan & Xu, Yiqing, 2019. "How Much Should We Trust Estimates from Multiplicative Interaction Models? Simple Tools to Improve Empirical Practice," Political Analysis, Cambridge University Press, vol. 27(2), pages 163-192, April.
    20. Jaeger, David A & Page, Marianne E, 1996. "Degrees Matter: New Evidence on Sheepskin Effects in the Returns to Education," The Review of Economics and Statistics, MIT Press, vol. 78(4), pages 733-740, November.
    21. de la Cuesta, Brandon & Egami, Naoki & Imai, Kosuke, 2022. "Improving the External Validity of Conjoint Analysis: The Essential Role of Profile Distribution," Political Analysis, Cambridge University Press, vol. 30(1), pages 19-45, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Georg Graetz, 2021. "On the interpretation of diploma wage effects estimated by regression discontinuity designs," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 54(1), pages 228-258, February.
    2. Mora Rodríguez, Jhon James & Muro, Juan, 2015. "On the size of sheepskin effects: A meta-analysis," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 9, pages 1-18.
    3. Daniel Kreisman & Jonathan Smith & Bondi Arifin, 2023. "Labor Market Signaling and the Value of College: Evidence from Resumes and the Truth," Journal of Human Resources, University of Wisconsin Press, vol. 58(6), pages 1820-1849.
    4. repec:osf:socarx:evm74_v1 is not listed on IDEAS
    5. Neugebauer, Martin & Daniel, Annabell, 2021. "Higher Education Non-Completion, Employers, and Labor Market Integration: Experimental Evidence," SocArXiv evm74, Center for Open Science.
    6. Lin Xiu & Morley Gunderson, 2013. "Credential Effects and the Returns to Education in China," LABOUR, CEIS, vol. 27(2), pages 225-248, June.
    7. Nick Huntington-Klein, 2021. "Human capital versus signaling is empirically unresolvable," Empirical Economics, Springer, vol. 60(5), pages 2499-2531, May.
    8. Khoo, Pauline & Ost, Ben, 2018. "The effect of graduating with honors on earnings," Labour Economics, Elsevier, vol. 55(C), pages 149-162.
    9. Piopiunik, Marc & Schwerdt, Guido & Simon, Lisa & Woessmann, Ludger, 2020. "Skills, signals, and employability: An experimental investigation," European Economic Review, Elsevier, vol. 123(C).
    10. Feng, Andy & Graetz, Georg, 2017. "A question of degree: The effects of degree class on labor market outcomes," Economics of Education Review, Elsevier, vol. 61(C), pages 140-161.
    11. Wang, Jun & Li, Bo, 2020. "Does employer learning with statistical discrimination exist in China? Evidence from Chinese Micro Survey Data," International Review of Economics & Finance, Elsevier, vol. 69(C), pages 319-333.
    12. O’Mahony, Mary & Pastor, José Manuel & Peng, Fei & Serrano, Lorenzo & Hernández, Laura, 2012. "Output growth in the post‐compulsory education sector: the European experience," MPRA Paper 44016, University Library of Munich, Germany.
    13. Nakabayashi, Masaki, 2011. "Schooling, employer learning, and internal labor market effect: Wage dynamics and human capital investment in the Japanese steel industry, 1930-1960s," MPRA Paper 30597, University Library of Munich, Germany.
    14. Wehner, Caroline & de Grip, Andries & Pfeifer, Harald, 2022. "Do recruiters select workers with different personality traits for different tasks? A discrete choice experiment," Labour Economics, Elsevier, vol. 78(C).
    15. Mahdi Gholami & Samuel Muehlemann, 2024. "Pathways to Prosperity: The Roles of Cognitive and Non-Cognitive Skills in Employer Quality and Early Career Earnings," Economics of Education Working Paper Series 0212, University of Zurich, Department of Business Administration (IBW), revised Dec 2024.
    16. Jhon James Mora & Juan Muro, 2007. "Diploma earning differences by gender in Colombia," Alcamentos 0802, Universidad de Alcalá, Departamento de Economía., revised 2008.
    17. Yang, Guanyi, 2018. "Endogenous Skills and Labor Income Inequality," MPRA Paper 89638, University Library of Munich, Germany.
    18. Mahmut Ablay & Fabian Lange, 2023. "Approaches to learn about employer learning," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 56(2), pages 343-356, May.
    19. Das, Tirthatanmoy & Polachek, Solomon, 2019. "A New Strategy to Identify Causal Relationships: Estimating a Binding Average Treatment Effect," IZA Discussion Papers 12766, Institute of Labor Economics (IZA).
    20. Manudeep Bhuller & Philipp Eisenhauer & Moritz Mendel, 2022. "Sequential Choices, Option Values, and the Returns to Education," Papers 2205.05444, arXiv.org, revised Jul 2024.
    21. Yue Yu & Chengkui Liu, 2023. "Pre-market discrimination or post-market discrimination: research on inequality of opportunity for labor income in China," Empirical Economics, Springer, vol. 64(5), pages 2291-2313, May.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:espost:320728. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/zbwkide.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.