IDEAS home Printed from https://ideas.repec.org/p/zbw/vfsc14/100338.html

The Economic Returns to Graduating with Honors - Evidence from Law Graduates

Author

Listed:
  • Schumann, Mathias
  • Freier, Ronny
  • Siedler, Thomas

Abstract

This paper studies the causal effects of graduating from university with an honors degree on subsequent labor market outcomes. 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 (about 14 percent), are more likely to work in public service (about 16 percentage points), are less likely to be self-employed (seven percentage points) and are more often engaged in Ph.D. studies (about 20 percentage points).

Suggested Citation

  • Schumann, Mathias & Freier, Ronny & Siedler, Thomas, 2014. "The Economic Returns to Graduating with Honors - Evidence from Law Graduates," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100338, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc14:100338
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/100338/1/VfS_2014_pid_246.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Hainmueller, Jens, 2012. "Entropy Balancing for Causal Effects: A Multivariate Reweighting Method to Produce Balanced Samples in Observational Studies," Political Analysis, Cambridge University Press, vol. 20(1), pages 25-46, January.
    2. Battistin, Erich & De Nadai, Michele & Sianesi, Barbara, 2014. "Misreported schooling, multiple measures and returns to educational qualifications," Journal of Econometrics, Elsevier, vol. 181(2), pages 136-150.
    3. Matthias Parey & Fabian Waldinger, 2011. "Studying Abroad and the Effect on International Labour Market Mobility: Evidence from the Introduction of ERASMUS," Economic Journal, Royal Economic Society, vol. 121(551), pages 194-222, March.
    4. Christopher Jepsen & Kenneth Troske & Paul Coomes, 2014. "The Labor-Market Returns to Community College Degrees, Diplomas, and Certificates," Journal of Labor Economics, University of Chicago Press, vol. 32(1), pages 95-121.
    5. David Card, 1993. "Using Geographic Variation in College Proximity to Estimate the Return to Schooling," Working Papers 696, Princeton University, Department of Economics, Industrial Relations Section..
    6. Barbara S. Grave & Katja Goerlitz, 2012. "Wage differentials by field of study -- the case of German university graduates," Education Economics, Taylor & Francis Journals, vol. 20(3), pages 284-302, March.
    7. Di Pietro, Giorgio, 2010. "The Impact of Degree Class on the First Destinations of Graduates: A Regression Discontinuity Approach," IZA Discussion Papers 4836, IZA Network @ LISER.
    8. David Card, 1993. "Using Geographic Variation in College Proximity to Estimate the Return to Schooling," Working Papers 696, Princeton University, Department of Economics, Industrial Relations Section..
    9. Jacobson, Louis & LaLonde, Robert & G. Sullivan, Daniel, 2005. "Estimating the returns to community college schooling for displaced workers," Journal of Econometrics, Elsevier, vol. 125(1-2), pages 271-304.
    10. Philip Oreopoulos, 2006. "Estimating Average and Local Average Treatment Effects of Education when Compulsory Schooling Laws Really Matter," American Economic Review, American Economic Association, vol. 96(1), pages 152-175, March.
    11. Alberto Abadie, 2005. "Semiparametric Difference-in-Differences Estimators," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 72(1), pages 1-19.
    12. Harmon, Colm & Walker, Ian, 1995. "Estimates of the Economic Return to Schooling for the United Kingdom," American Economic Review, American Economic Association, vol. 85(5), pages 1278-1286, December.
    13. Giorgio Brunello & Margherita Fort & Guglielmo Weber, 2009. "Changes in Compulsory Schooling, Education and the Distribution of Wages in Europe," Economic Journal, Royal Economic Society, vol. 119(536), pages 516-539, March.
    14. James J. Heckman & Hidehiko Ichimura & Petra E. Todd, 1997. "Matching As An Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 64(4), pages 605-654.
    15. Blundell, Richard, et al, 2000. "The Returns to Higher Education in Britain: Evidence from a British Cohort," Economic Journal, Royal Economic Society, vol. 110(461), pages 82-99, February.
    16. Hainmueller, Jens & Xu, Yiqing, 2013. "ebalance: A Stata Package for Entropy Balancing," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 54(i07).
    17. Ronny Freier & Johanna Storck, 2012. "The Treatment Effect of Attending a High-Quality School and the Influence of Unobservables," Discussion Papers of DIW Berlin 1256, DIW Berlin, German Institute for Economic Research.
    18. Jörn-Steffen Pischke & Till von Wachter, 2008. "Zero Returns to Compulsory Schooling in Germany: Evidence and Interpretation," The Review of Economics and Statistics, MIT Press, vol. 90(3), pages 592-598, August.
    19. Philip Oreopoulos & Kjell G. Salvanes, 2011. "Priceless: The Nonpecuniary Benefits of Schooling," Journal of Economic Perspectives, American Economic Association, vol. 25(1), pages 159-184, Winter.
    20. Katja Görlitz & Barbara S. Grave, 2012. "Wage Differentials by Field of Study – The Case of German University Graduates," Ruhr Economic Papers 0316, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    21. Joseph G. Altonji & Todd E. Elder & Christopher R. Taber, 2005. "An Evaluation of Instrumental Variable Strategies for Estimating the Effects of Catholic Schooling," Journal of Human Resources, University of Wisconsin Press, vol. 40(4), pages 791-821.
    22. Richard Blundell & Monica Costa Dias & Costas Meghir & John Van Reenen, 2004. "Evaluating the Employment Impact of a Mandatory Job Search Program," Journal of the European Economic Association, MIT Press, vol. 2(4), pages 569-606, June.
    23. Joshua D. Angrist & Alan B. Keueger, 1991. "Does Compulsory School Attendance Affect Schooling and Earnings?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(4), pages 979-1014.
    24. Melvin Stephens Jr. & Dou-Yan Yang, 2014. "Compulsory Education and the Benefits of Schooling," American Economic Review, American Economic Association, vol. 104(6), pages 1777-1792, June.
    25. Mark Hoekstra, 2009. "The Effect of Attending the Flagship State University on Earnings: A Discontinuity-Based Approach," The Review of Economics and Statistics, MIT Press, vol. 91(4), pages 717-724, November.
    26. Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 87(3), pages 355-374.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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.

    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. Freier, Ronny & Schumann, Mathias & Siedler, Thomas, 2015. "The earnings returns to graduating with honors — Evidence from law graduates," Labour Economics, Elsevier, vol. 34(C), pages 39-50.
    2. Saniter, Nils & Siedler, Thomas, 2014. "Door Opener or Waste of Time? The Effects of Student Internships on Labor Market Outcomes," IZA Discussion Papers 8141, IZA Network @ LISER.
    3. Shushanik Margaryan & Nils Saniter & Mathias Schumann & Thomas Siedler, 2022. "Do Internships Pay Off? The Effects of Student Internships on Earnings," Journal of Human Resources, University of Wisconsin Press, vol. 57(4), pages 1242-1275.
    4. de New, Sonja C. & Schurer, Stefanie & Sulzmaier, Dominique, 2021. "Gender differences in the lifecycle benefits of compulsory schooling policies," European Economic Review, Elsevier, vol. 140(C).
    5. Diego Ambasz & Anshuman Gupta & Harry A Patrinos, 2025. "A review of human development and environmental outcomes," Economics Bulletin, AccessEcon, vol. 45(4), pages 1687-1709.
    6. Bahadır Dursun & Resul Cesur, 2016. "Transforming lives: the impact of compulsory schooling on hope and happiness," Journal of Population Economics, Springer;European Society for Population Economics, vol. 29(3), pages 911-956, July.
    7. Lepinteur, Anthony & Nieto, Adrián, 2025. "All about the money? The gendered effect of education on industrial and occupational sorting," Labour Economics, Elsevier, vol. 92(C).
    8. Cygan-Rehm, Kamila, 2018. "Is additional schooling worthless? Revising the zero returns to compulsory schooling in Germany," VfS Annual Conference 2018 (Freiburg, Breisgau): Digital Economy 181528, Verein für Socialpolitik / German Economic Association.
    9. Sun, Yucheng & Li, Meizhen & Pan, Zhewen & Zhou, Xianbo, 2026. "Who benefits from compulsory education? Evidence from the average and heterogeneous effects on migrant welfare in China," China Economic Review, Elsevier, vol. 95(C).
    10. Patrinos, Harry Anthony & Rivera-Olvera, Angelica, 2026. "The Returns to Education in Arkansas: Evidence from the 1987 Compulsory Education Law," GLO Discussion Paper Series 1703, Global Labor Organization (GLO).
    11. Daniel A. Kamhöfer & Hendrik Schmitz, 2013. "Analyzing Zero Returns to Education in Germany – Heterogeneous Eff ects and Skill Formation," Ruhr Economic Papers 0446, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    12. Moschion, Julie & van Ours, Jan C., 2025. "Lifting up the lives of extremely disadvantaged youth: The role of staying in school longer," Journal of Economic Behavior & Organization, Elsevier, vol. 238(C).
    13. DeCicca, Philip & Krashinsky, Harry, 2020. "Does education reduce teen fertility? Evidence from compulsory schooling laws," Journal of Health Economics, Elsevier, vol. 69(C).
    14. Jens Ruhose & Stephan L. Thomsen & Insa Weilage, 2018. "The Wider Benefits of Adult Learning: Work-Related Training and Social Capital," CESifo Working Paper Series 7268, CESifo.
    15. David J. Deming & Mikko I. Silliman, 2024. "Skills and Human Capital in the Labor Market," NBER Working Papers 32908, National Bureau of Economic Research, Inc.
    16. Ã lvaro Choi, 2023. "The Impact of Compulsory Schooling Expansion on Educational Outcomes: The Case of Indonesia," UB School of Economics Working Papers 2023/452, University of Barcelona School of Economics.
    17. Shen, Danqing, 2018. "Better Educated, Fewer Divorces: The Impact of College Education Quality on Marriage Outcomes," MPRA Paper 94198, University Library of Munich, Germany.
    18. Fischer, Martin & Karlsson, Martin & Nilsson, Therese & Schwarz, Nina, 2016. "The Sooner the Better? Compulsory Schooling Reforms in Sweden," IZA Discussion Papers 10430, IZA Network @ LISER.
    19. Berger, Marius & Gottschalk, Sandra, 2021. "Financing and advising early stage startups: The effect of angel investor subsidies," ZEW Discussion Papers 21-069, ZEW - Leibniz Centre for European Economic Research.
    20. Assaad, Ragui & Aydemir, Abdurrahman B. & Dayıoğlu, Meltem & Kırdar, Murat Güray, 2026. "Wage returns to human capital resulting from an extra year of primary school: Evidence from Egypt," Economics of Education Review, Elsevier, vol. 111(C).

    More about this item

    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

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:vfsc14:100338. 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/vfsocea.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.