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

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  • Juerg Schweri

Abstract

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

Suggested Citation

  • Juerg Schweri, 2004. "Does it pay to be a good student? Results from the Swiss graduate labour market," Diskussionsschriften dp0405, Universitaet Bern, Departement Volkswirtschaft.
    • Handle: RePEc:ube:dpvwib:dp0405
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    References listed on IDEAS

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    1. 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.
    2. 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.
    3. Büchel, Felix & Pollmann-Schult, Matthias, 2001. "Overeducation and Skill Endowments The Role of School Achievement and Vocational Training Quality," IZA Discussion Papers 337, Institute of Labor Economics (IZA).
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    Citations

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    Cited by:

    1. Oswald, Yvonne & Backes-Gellner, Uschi, 2014. "Learning for a bonus: How financial incentives interact with preferences," Journal of Public Economics, Elsevier, vol. 118(C), pages 52-61.
    2. 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.
    3. repec:zbw:rwirep:0316 is not listed on IDEAS
    4. Denny, Kevin & Doyle, Orla & McMullin, Patricia & O'Sullivan, Vincent, 2014. "Money, mentoring and making friends: The impact of a multidimensional access program on student performance," Economics of Education Review, Elsevier, vol. 40(C), pages 167-182.
    5. 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.
    6. Verena Dill & Anke Hammen, 2011. "Einkommensdifferenziale zwischen Bachelor- und Diplomabsolventen - Humankapital oder Signal?," Research Papers in Economics 2011-04, University of Trier, Department of Economics.
    7. Regula Geel & Uschi Backes-Gellner, 2010. "Earning While Learning: Labor Market Returns to Student Employment During Tertiary Education," Economics of Education Working Paper Series 0049, University of Zurich, Department of Business Administration (IBW).

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    More about this item

    Keywords

    university graduates; labor market; grades; wages;
    All these keywords.

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - 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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