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The Expected (Signaling) Value of Higher Education

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  • Ehrmantraut, Laura

    (University of Bonn)

  • Pinger, Pia

    (University of Cologne)

  • Stans, Renske

    (University of Bonn)

Abstract

This paper explores students' expectations about the returns to completing higher education and provides first evidence on perceived signaling and human capital effects. We elicit counterfactual labor market expectations for the hypothetical scenarios of leaving university with or without a degree certificate among a large and diverse sample of students at different stages of higher education. Our findings indicate substantial perceived returns to higher education. Moreover, by exploiting within-individual variation, we document sizeable expected labor market returns from signaling, whereas perceived productivity-enhancing (human capital) returns seem to be less pronounced. Over the expected course of career, we find lasting education premia as well as evidence consistent with employer learning.

Suggested Citation

  • Ehrmantraut, Laura & Pinger, Pia & Stans, Renske, 2020. "The Expected (Signaling) Value of Higher Education," IZA Discussion Papers 13729, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp13729
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    Cited by:

    1. Laura Ehrmantraut & Pia Pinger & Renske Stans, 2020. "Bildungsrendite: Was erhoffen sich Studierende von ihrem Abschluss?," ECONtribute Policy Brief Series 012, University of Bonn and University of Cologne, Germany.
    2. Del Bono, Emilia & Etheridge, Ben & Garcia, Paul, 2024. "The economic value of childhood socio-emotional skills," ISER Working Paper Series 2024-01, Institute for Social and Economic Research.
    3. Moritz Mendel, 2024. "Nonstandard Educational Careers and Inequality," CRC TR 224 Discussion Paper Series crctr224_2024_592, University of Bonn and University of Mannheim, Germany.
    4. Joanna Franaszek, 2022. "Choosing a Field of Education: Signaling, Mismatch, and Equilibrium Shifting," Ekonomista, Polskie Towarzystwo Ekonomiczne, issue 1, pages 94-113.

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    More about this item

    Keywords

    signaling; returns to education; higher education; educational attainment; licensing;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • 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
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations

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