Earnings jump in the year a qualification is completed, by more than the extra year of schooling alone would explain.
Hungerford and Solon found in 1987 that American returns to schooling rose sharply at the years that complete a qualification, the twelfth and sixteenth, rather than smoothly year by year. Jaeger and Page confirmed it in 1996 with data on the degrees people actually held. The name comes from the parchment that diplomas were once printed on.
In practice
- A firm pays a graduate markedly more than a candidate who completed all but one module of the same degree.
- A student two courses short of a degree finds that employers treat him as having none.
- Standing
- The jump is well established. Whether it shows that diplomas mostly signal ability, or that people who finish differ from those who do not in ways that also raise pay, is disputed. Compare signalling.
- Subject
- Learning & Education
- Essay
- What works in learning, and what schools can and cannot change