How Much Value Does an "Elite" College Provide?
How far will a degree from an elite college get you? A new working paper (ungated version here) from Kevin Lang and Erez Siniver tries to answer that question by?examining labor-market outcomes for Israeli students at Hebrew University (a leading university) and the College of Management Academic Studies (a “professional undergraduate college”). The authors found that a degree from an elite college will help you get a foot in the door, but skill quickly triumphs. “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,” the authors conclude. “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 HU 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.” [%comments]