University education and income – does prior achievement matter?
The purpose of this study is to find out if the income premium from university entrance differs with respect to prior achievement as measured by previous grades. Using income at the age of 28 to 30, we analyze if high-achievers have larger income premiums from entering university than low-achievers in a sample of Swedish upper secondary school students. We find that income differences generally are positive, albeit larger for females than for males. It is also found that the income premium is larger for high-achievers than for low-achievers. However, especially for males, the income premium rises only marginally with prior achievement for a large part of the grade distribution, indicating that there are only small differences in the returns to university entrance for a majority of upper secondary school graduates.
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