The Earnings Returns to Graduating with Honors: Evidence from Law Graduates

50 Pages Posted: 14 Feb 2015

See all articles by Ronny Freier

Ronny Freier

Stockholm School of Economics

Mathias Schumann

University of Hamburg

Thomas Siedler

University of Hamburg - Faculty of Business, Economics, and Social Sciences; DIW Berlin; Institute for the Study of Labor (IZA); University of Essex

Abstract

This paper studies the causal effects of graduating from university with an honors degree on subsequent earnings. While a rich body of literature has focused on estimating returns to human capital, few studies have analyzed returns at the very top of the education distribution. We highlight the importance of honors degrees for future labor market success in the context of German law graduates. Using a difference-in-differences research design combined with entropy balancing, we find that students of law who passed the state bar exam with an honors degree receive a significant earnings premium of about 14 percent. The results are robust to various sensitivity analyzes.

Keywords: returns to education, difference-in-differences, entropy balancing, law graduates, earnings

JEL Classification: J01, J31, J44

Suggested Citation

Freier, Ronny and Schumann, Mathias and Siedler, Thomas, The Earnings Returns to Graduating with Honors: Evidence from Law Graduates. IZA Discussion Paper No. 8825. Available at SSRN: https://ssrn.com/abstract=2564958

Ronny Freier (Contact Author)

Stockholm School of Economics ( email )

PO Box 6501
Stockholm, 11383
Sweden

HOME PAGE: http://www.hhs.se/Faculty/showperson.htm?personid=1591

Mathias Schumann

University of Hamburg ( email )

Allende-Platz 1
Hamburg, 20146
Germany

Thomas Siedler

University of Hamburg - Faculty of Business, Economics, and Social Sciences ( email )

Von-Melle-Park 9
Hamburg, 20146
Germany

DIW Berlin ( email )

Mohrenstra├če 58
Berlin, 10117
Germany

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

University of Essex ( email )

Wivenhoe Park
Colchester, CO4 3SQ
United Kingdom

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