Why is an Elite Undergraduate Education Valuable? Evidence from Israel

40 Pages Posted: 31 Jan 2011 Last revised: 3 Feb 2011

See all articles by Kevin Lang

Kevin Lang

Boston University - Department of Economics; National Bureau of Economic Research (NBER)

Erez Siniver

College of Management (Israel)

Date Written: January 2011

Abstract

In this paper we compare the labor market performance of Israeli students who graduated from one of the leading universities, Hebrew University (HU), with those who graduated from a professional undergraduate college, College of Management Academic Studies (COMAS). Our results support a model in which employers have good information about the quality of HU graduates and pay them according to their ability, but in which the market has relatively little information about COMAS graduates. Hence, high-skill COMAS graduates are initially treated as if they were the average COMAS graduate, who is weaker than a HU graduate, consequently earning less than UH graduates. However, over time the market differentiates among them so that after several years of experience, COMAS and HU graduates with similar entry scores have similar earnings. Our results are therefore consistent with the view that employers use education information to screen workers but that the market acquires information fairly rapidly.

Suggested Citation

Lang, Kevin and Siniver, Erez, Why is an Elite Undergraduate Education Valuable? Evidence from Israel (January 2011). NBER Working Paper No. w16730, Available at SSRN: https://ssrn.com/abstract=1749890

Kevin Lang (Contact Author)

Boston University - Department of Economics ( email )

270 Bay State Road
Boston, MA 02215
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Erez Siniver

College of Management (Israel)

7 Yitzhak Rabin Boulevard
P. O. Box 9141
Rishon LeZion, 75190
Israel

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