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Quality of higher education and earnings: Regression discontinuity evidence from the French Baccalaureate

Canaan, Serena and Mouganie, Pierre (2014): Quality of higher education and earnings: Regression discontinuity evidence from the French Baccalaureate.

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An emerging body of literature examines the economic returns to quality of postsecondary education. This literature has predominantly focused on the returns to the most selective universities. However, less is known about the extent to which these gains are realized for the academically marginal student who does not necessarily attend the most selective of institutions. In this paper, we address this question by exploiting the presence of the Baccalaur\'{e}at G\'{e}n\'{e}ral (or the General Baccalaureate), a degree that students in France must earn to graduate from secondary school and enroll in postsecondary institutions. The degree is awarded upon passing a series of national exams. Students can retake the exam in the same year but the standards for passing are higher in the first round. Our data links individual-level information on secondary and postsecondary education to labor market outcomes, allowing us to track the complete educational and professional paths of all students in our sample. We use a regression discontinuity design that compares the outcomes of students who marginally pass and fail the first round of the French Baccalaureate exam. Marginally passing increases the likelihood of attending a higher quality university and a STEM major. Threshold crossing also raises earnings by 13.6 percent at the age of 27 to 29. After ruling out other channels that could affect earnings, we conclude that increased access to higher quality postsecondary education leads to a significant earnings premium for academically marginal students.

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