Incentives for Schools, Educational Signals and Labour Market Outcomes

39 Pages Posted: 27 Aug 2006

See all articles by Uschi Backes-Gellner

Uschi Backes-Gellner

University of Zurich - Institute for Business Administration; Swiss Leading House

Stephan Veen

University of Zurich - Department of Business Administration (IBW)

Date Written: August 2006

Abstract

Central exams have been discussed as an incentive to improve educational outcomes. In our paper we study the impact of central exams on labor market outcomes. We explain the quality choice of schools under central and non-central exams and model the resulting students' schooling decisions and employers' wage decisions. We use the German Abitur and the variation among the German federal states with respect to central exams as a quasi experimental design. We expect the ratio of Abitur holders to increase in states without central exams and their wage premiums to decrease at the same time. In states with central exams these effects should not occur. We test our implications with official statistics on education and with the GSOEP. The first two implications are born out in the data. Finally, explanations and policy recommendations are discussed.

Keywords: Educational Economics, School choice, Incentives for Schools, Central Exams, Economic impact, Labor Market Outcome

JEL Classification: M51, J31, I28

Suggested Citation

Backes-Gellner, Uschi and Veen, Stephan, Incentives for Schools, Educational Signals and Labour Market Outcomes (August 2006). Available at SSRN: https://ssrn.com/abstract=926474 or http://dx.doi.org/10.2139/ssrn.926474

Uschi Backes-Gellner (Contact Author)

University of Zurich - Institute for Business Administration ( email )

Plattenstrasse 14
8032 Zurich
Switzerland
+41 44 6344281 (Phone)
+41 44 6344370 (Fax)

Swiss Leading House ( email )

Plattenstrasse 14
Zurich, 8032
Switzerland

Stephan Veen

University of Zurich - Department of Business Administration (IBW) ( email )

Hottingerstrasse 10
Plattenstrasse 14
Zurich, 8032
Switzerland

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