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The Sheepskin Effect In The Hungarian Labour Market 2010-2012: Analysis Of Data From The Hungarian Graduate Tracking System

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  • Kun Andras Istvan

    (University of Debrecen,)

Abstract

The sheepskin effect is a wage increase connected to the attainment of a degree (or credential) in addition to the wage gap connected to the completion of a schooling level (school years, exams passed etc.). This effect is often referred to as a phenomenon supporting the signaling (or screening) hypothesis against human capital theory in the so called 'signaling vs. human capital debate' over the economic role of education. Many empirical studies in many countries have tested (mostly successfully) this hypothesis during the last decades, but it has never been tested in Hungary. Therefore the main goal of the current study is to identify and measure the sheepskin effect in Hungarian higher education based on the country-wide, representative databases of the Hungarian Graduate Career Tracking System (HGCTS). The 2 databases used in the analysis are two HGCTS surveys from the years 2011 and 2012. The first part of the article is a literature review that summarises the results of the existing empirical sheepskin research and highlights their connections to the signaling vs. human capital debate. In the second part, empirical research is carried out based on the HGCTS data. This research has two phases. In the first phase subjective data are analysed (according to the perceived negative effect of not obtaining the degree in time), while in the second, mean differences are tested between net hourly wages of responder groups (1) who have the educational credential and (2) do not have it (even though they have finished all courses and passed all exams at the given educational level). The statistical analysis identified significant wage gaps between graduated responders and those who had not graduated but had passed the state exam (and so had finished all the exams in higher education before graduating) on nearly all levels and in both samples (the only exemption was the post-Bologna master level in the 2011 sample). We can conclude that the existence of the sheepskin effect in the Hungarian higher education has been supported.

Suggested Citation

  • Kun Andras Istvan, 2014. "The Sheepskin Effect In The Hungarian Labour Market 2010-2012: Analysis Of Data From The Hungarian Graduate Tracking System," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 492-499, July.
    • Handle: RePEc:ora:journl:v:1:y:2014:i:1:p:492-499
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    References listed on IDEAS

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    More about this item

    Keywords

    Sheepskin effect; labour market; higher education; graduate career tracking;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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