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The Earnings Returns to Graduating with Honors: Evidence from Law Graduates

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  • Freier, Ronny

    () (DIW Berlin)

  • Schumann, Mathias

    () (University of Hamburg)

  • Siedler, Thomas

    () (University of Hamburg)

Abstract

This paper studies the causal effects of graduating from university with an honors degree on subsequent earnings. While a rich body of literature has focused on estimating returns to human capital, few studies have analyzed returns at the very top of the education distribution. We highlight the importance of honors degrees for future labor market success in the context of German law graduates. Using a difference-in-differences research design combined with entropy balancing, we find that students of law who passed the state bar exam with an honors degree receive a significant earnings premium of about 14 percent. The results are robust to various sensitivity analyzes.

Suggested Citation

  • Freier, Ronny & Schumann, Mathias & Siedler, Thomas, 2015. "The Earnings Returns to Graduating with Honors: Evidence from Law Graduates," IZA Discussion Papers 8825, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp8825
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    2. World Bank Group, 2017. "Republic of Malawi Poverty Assessment," World Bank Other Operational Studies 26488, The World Bank.
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    4. 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.
    5. Hetschko, Clemens & Schöb, Ronnie & Wolf, Tobias, 2016. "Income support, (un-)employment and well-being," Discussion Papers 2016/15, Free University Berlin, School of Business & Economics.
    6. Peter, Frauke H. & Spieß, C. Katharina, 2016. "Family Instability and Locus of Control in Adolescence," EconStor Open Access Articles, ZBW - Leibniz Information Centre for Economics, pages 1439-1471.
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    13. Jacek Liwiński & Emilia Bedyk, 2016. "Does it pay to invest in the education of children?," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 47.
    14. Emilia Bedyk & Jacek Liwiński, 2016. "The wage premium from parents’ investments in the education of their children in Poland," Working Papers 2016-14, Faculty of Economic Sciences, University of Warsaw.

    More about this item

    Keywords

    entropy balancing; difference-in-differences; returns to education; law graduates; earnings;

    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations

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