The Big Sort : College Reputation and Labor Market Outcomes / W. Bentley MacLeod [and three others], National Bureau of Economic Research.

Author
MacLeod, W. Bentley (William Bentley), 1954- [Browse]
Format
Book
Language
English
Published/​Created
Cambridge, Massachusetts : National Bureau of Economic Research, 2015.
Description
1 online resource (72 pages) : illustrations.

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Series
Working paper series (National Bureau of Economic Research) ; number 21230. [More in this series]
Summary note
Spence (1973) noted that individuals' choice of educational quantity -- measured by years of schooling -- may stem partially from a desire to signal their ability to the labor market. This paper asks if individuals' choice of educational quality -- measured by college reputation -- may likewise signal their ability. We use data on the admission scores of all Colombian college graduates to define a measure of reputation that gives clear predictions in a signaling framework. We find that college reputation, unlike years of schooling, is correlated with graduates' earnings growth. We also show that Colombia's staggered rollout of a new signal of skill -- a college exit exam -- reduced the earnings return to reputation and increased the return to individual admission scores. These results are consistent with the hypothesis that a college's reputation provides information about the ability of its student body and about its value added, broadly understood.
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