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Title: Worker Signals among New College Graduates: The Role of Selectivity and GPA
Resulting in 1 citation.
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Hershbein, Brad |
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Worker Signals among New College Graduates: The Role of Selectivity and GPA Upjohn Institute Working Paper No. 13-190, W.E. Upjohn Institute for Employment Research, January 2013. Also: http://research.upjohn.org/up_workingpapers/190/ Cohort(s): NLSY97 Publisher: W.E. Upjohn Institute for Employment Research Keyword(s): Armed Services Vocational Aptitude Battery (ASVAB); College Characteristics; College Graduates; Earnings; Grade Point Average (GPA)/Grades; High School and Beyond (HSB); National Education Longitudinal Survey (NELS); National Longitudinal Study of the High School Class of 1972 (NLS72); Project Talent Permission to reprint the abstract has not been received from the publisher. Recent studies have found a large earnings premium to attending a more selective college, but the mechanisms underlying this premium have received little attention and remain unclear. In order to shed light on this question, I develop a multidimensional signaling model relying on college grades and selectivity that rationalizes students' choices of effort and firms' wage-setting behavior. The model is then used to produce predictions of how the interaction of the signals should be related to wages, namely that the return on college GPA should fall the more selective the institution attended. Using five data sets that span the early 1960s through the late 2000s, I show that the data support the predictions of the signaling model, with support growing stronger over time as college sorting by ability has increased. The findings imply that return to college selectivity depends on GPA, something previously not recognized in the literature, and they can rationalize why employers learn more quickly about college graduates' productivity than less educated workers'. |
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Bibliography Citation
Hershbein, Brad. "Worker Signals among New College Graduates: The Role of Selectivity and GPA." Upjohn Institute Working Paper No. 13-190, W.E. Upjohn Institute for Employment Research, January 2013. |