Sheepskin effects and heterogenous wage-setting behaviour: Evidence from Mozambique

Arbeitspapier

Using a unique panel survey of final-year undergraduates at six of the largest universities in Mozambique, we study the wage premium associated with completing an undergraduate degree. Conditional on a very rich set of controls, including pre-degree earnings, objective measures of ability, and academic performance, we find heterogeneity in 'sheepskin effects' across different kinds of firms. We propose a simple model of wage-setting in which productivity is only partially observable in some firms and fully observable in others. In this setting, education serves both to enhance productivity and as a productivity signal. Consistent with the theory, positions where productivity is likely to be less observable offer larger sheepskin effects.

Object Details

• ISBN: 978-92-9267-463-2
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: WIDER Working Paper ; No. 2024/5

Classification and Topics

• Classification: Wirtschaft ; Returns to Education ; Wage Level and Structure; Wage Differentials
• Subject: returns to education ; wage-setting ; productivity ; Mozambique

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Jaeger, David A. ; Jones, Sam
• Event: Veröffentlichung
• (who): The United Nations University World Institute for Development Economics Research (UNU-WIDER)
• (where): Helsinki
• (when): 2024

Further information

• DOI: doi:10.35188/UNU-WIDER/2024/463-2
• Handle: http://hdl.handle.net/10419/283851
• Last update: 10.03.2025, 11:43 AM CET