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Does it pay to be a good student? Results from the Swiss graduate labour market

  • Juerg Schweri

Surprisingly little is known about the relation between grades and wages. This relation is analysed using a sample of ca. 1'700 individuals that graduated in Swiss universities in 1998. Testing different operationalisations of the grade variable, we find a significant and robust effect of grades on the annual wage one year after graduation. When wage is specified as wage per actual hour of work, instead of formal hours of work, the effect becomes insignificant. Four years after graduation, however, grades have a higher and significant effect on wages based on formal working time as well as on wages based on actual working time. We conclude that people with higher grades get jobs with better career prospects when entering the labour market. Thus, the wage effect of university graduates' final grades is non-transitory and increasing over time. This finding calls for further research in the role that grades play in labour markets

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Paper provided by Universitaet Bern, Departement Volkswirtschaft in its series Diskussionsschriften with number dp0405.

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Date of creation: Mar 2004
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Handle: RePEc:ube:dpvwib:dp0405
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  1. Card, David & Krueger, Alan B, 1992. "Does School Quality Matter? Returns to Education and the Characteristics of Public Schools in the United States," Journal of Political Economy, University of Chicago Press, vol. 100(1), pages 1-40, February.
  2. Carvajal, Manuel J. & Bendana, David & Bozorgmanesh, Alireza & Castillo, Miguel A. & Pourmasiha, Katayoun & Rao, Priya & Torres, Juan A., 2000. "Inter-gender differentials between college students' earnings expectations and the experience of recent graduates," Economics of Education Review, Elsevier, vol. 19(3), pages 229-243, June.
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