Diploma as signal? Estimating sheepskin effects in the Philippines
The screening theory of education argues that education does not necessarily enhance worker’s productivity, but serves only as a signal of worker’s pre-existing ability. Empirical studies found that the mere possession of a diploma increases wages disproportionately than without it, or the so-called...
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| Format: | text |
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Archīum Ateneo
2018
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| Online Access: | https://archium.ateneo.edu/asog-pubs/74 https://www.sciencedirect.com/science/article/pii/S0738059316304539?via%3Dihub#! |
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| Institution: | Ateneo De Manila University |
| Summary: | The screening theory of education argues that education does not necessarily enhance worker’s productivity, but serves only as a signal of worker’s pre-existing ability. Empirical studies found that the mere possession of a diploma increases wages disproportionately than without it, or the so-called sheepskin effects. Using a sample of urban non-agricultural wage workers in the Philippines, this paper finds substantial sheepskin effects for holding a tertiary diploma, even after controlling for individual heterogeneity. While returns to tertiary education are lower in the competitive (private) sector, there is evidence of diverging age-earnings profiles between tertiary and secondary graduates, indicating a productive value higher education. |
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