Fraternities and Labor Market Outcomes

American Economic Journal: Microeconomics, Vol, 4, No. 1, 2012

38 Pages Posted: 12 Jun 2008 Last revised: 29 Feb 2012

See all articles by Sergey V. Popov

Sergey V. Popov

Cardiff University - Cardiff Business School

Dan Bernhardt

University of Illinois at Urbana-Champaign - Department of Economics

Date Written: September 30, 2010

Abstract

We model how student choices to rush a fraternity, and fraternity admission choices, interact with signals firms receive about student productivities to determine labor-market outcomes. The fraternity and students value wages and fraternity socializing values. We provide sufficient conditions under which, in equilibrium, most members have intermediate abilities: weak students apply, but are rejected unless they have high socializing values, while most able students do not apply to avoid taint from association with weaker members. We show this equilibrium reconciles the ability distribution of fraternity members at the University of Illinois, and estimate the fraternity's welfare impact on different students.

Keywords: self-selection, screening, fraternities, statistical discrimination

JEL Classification: J31, D82, H4

Suggested Citation

Popov, Sergey V. and Bernhardt, Dan, Fraternities and Labor Market Outcomes (September 30, 2010). American Economic Journal: Microeconomics, Vol, 4, No. 1, 2012. Available at SSRN: https://ssrn.com/abstract=1142859

Sergey V. Popov

Cardiff University - Cardiff Business School ( email )

Aberconway Building
Colum Drive
Cardiff, CF10 3EU
United Kingdom

Dan Bernhardt (Contact Author)

University of Illinois at Urbana-Champaign - Department of Economics ( email )

1206 South Sixth Street
Champaign, IL 61820
United States
217-244-5708 (Phone)

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