Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/108706
Authors: 
Feng, Andy
Graetz, Georg
Year of Publication: 
2015
Series/Report no.: 
IZA Discussion Papers 8826
Abstract: 
How does measured performance at university affect labor market outcomes? We show that degree class – a coarse measure of student performance used in the UK – causally affects graduates' industry and hence expected wages. To control for unobserved ability, we employ a regression discontinuity design that utilizes rules governing the award of degrees. A First Class (Upper Second) increases the probability of working in a high-wage industry by thirteen (eight) percentage points, and leads to three (seven) percent higher expected wages. The results point to the importance of statistical discrimination, heuristic decision making, and luck in the labor market.
Subjects: 
high skill wage inequality
regression discontinuity design
statistical discrimination
JEL: 
C26
I24
J24
J31
Document Type: 
Working Paper

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