Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/314727 
Year of Publication: 
2025
Series/Report no.: 
CESifo Working Paper No. 11688
Publisher: 
CESifo GmbH, Munich
Abstract: 
A university degree is a risky investment because of the non-negligible risk of having to drop out of university without graduating. However, the costs of this risk are controversial, as it is often argued that even an uncertified year of study has a value in the labor market. To determine this value causally, however, alternatives to studying must also be considered, which is done here with the help of a discrete choice experiment with a representative sample of over 2,500 HR recruiters. The result is that dropping out of university with a major closely related to an advertised job leads to similar labor market outcomes as if someone had not studied at all. Without a direct link to a job, however, dropping out of university significantly reduces lifetime earnings. Furthermore, HR recruiters clearly prefer applicants who have used the years without studying for human capital accumulation in an alternative way, for example in the form of a traineeship.
Subjects: 
dropouts
hiring decisions
discrete choice experiment
sheepskin effect
willingness to pay
tertiary education
JEL: 
I26
J23
J24
J31
M51
Document Type: 
Working Paper
Appears in Collections:

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.