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Sheepskin Effects in the Returns to Education

Thomas Hungerford and Gary Solon
The Review of Economics and Statistics
Vol. 69, No. 1 (Feb., 1987), pp. 175-177
Published by: MIT Press
DOI: 10.2307/1937919
Stable URL: http://www.jstor.org/stable/1937919
Page Count: 3
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Sheepskin Effects in the Returns to Education
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Abstract

Some previous discussions have dismissed screening theories of education partly on the ground that diploma years of education do not confer especially large earnings gains. Similarly, most empirical research on earnings functions has assumed an absence of "sheepskin" effects. We report evidence, however, of substantial and statistically significant sheepskin effects. Although this suggests that the previous dismissals of the screening hypothesis were premature, our evidence of sheepskin effects is amenable to nonscreening interpretations also.

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