Event Title

The returns on Earnings from Schooling - the Sheepskin Effects

Session

Management, Business and Economics

Description

It is widely known and accepted in the economic theory that education increases productivity. Mincer’s theory states that a year at school increases earnings by about 10%. Having said this, we could estimate that for each year of school finished, the increases in earnings are proportionate. However, when looking at the data for the USA, we have found that there are increases, but not proportionate for each year of school finished, with huge differences in earnings between those who get a diploma and those who don’t. This effect is known as the Sheepskin Effect, and this paper proves that to this day, this effect still exists, but starts diminishing when experience increases.

Keywords:

Sheepskin Effects, Productivity, Returns from school, Mincer's theory

Session Chair

Edmond Hajrizi

Session Co-Chair

Naim Preniqi

Proceedings Editor

Edmond Hajrizi

ISBN

978-9951-437-69-1

Location

Pristina, Kosovo

Start Date

27-10-2018 9:00 AM

End Date

27-10-2018 10:30 AM

DOI

10.33107/ubt-ic.2018.321

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Oct 27th, 9:00 AM Oct 27th, 10:30 AM

The returns on Earnings from Schooling - the Sheepskin Effects

Pristina, Kosovo

It is widely known and accepted in the economic theory that education increases productivity. Mincer’s theory states that a year at school increases earnings by about 10%. Having said this, we could estimate that for each year of school finished, the increases in earnings are proportionate. However, when looking at the data for the USA, we have found that there are increases, but not proportionate for each year of school finished, with huge differences in earnings between those who get a diploma and those who don’t. This effect is known as the Sheepskin Effect, and this paper proves that to this day, this effect still exists, but starts diminishing when experience increases.