Sheepskin Effects in the Returns to Education: Evidence on Swedish Data

Abstract

The empirical labor literature often refers returns to specific credentials of education as sheepskin effects. Previous studies might suffer from potential flaws as they use an approach, which overlook the presence of an "education effect" from receipt of a diploma. This paper examines and reports evidence of sheepskin effects at both university level and at high school level, in the Swedish labor market. In contrast to previous US studies the paper considers and reports the existence of an "education effect" involved when estimating the sheepskin effect. The paper also reports evidence on diminishing sheepskin effects with tenure at the current firm.Returns to education; Sheepskin effects