The returns to graduating with honors - Evidence from law graduates
Abstract:
The paper studies the causal effects of graduating from university with an honors degree on subsequent labor market outcomes. While a rich literature has focused on the identification of the returns to human capital, few studies could analyze returns at the very top of the education distribution. We highlight the importance of honors degrees for future labor market success in the context of German law students. Using multiple empirical designs (regression-control, matching, difference-in-difference, regression discontinuity design), we find that students of law who passed the state bar exam with an honors degree receive a sizable and significant earnings premium, are more likely to work in public service, are less likely to be self-employed, and are more often engaged in Ph.D. studies.