Diploma Effects

Diploma effects are usually defined as disproportionately large increases in returns to schooling after the completion of a certain number of years that usually entail a degree. Diploma effect is a notion that challenges or rejects the intrinsic value of education, including higher education. Diploma effects take place when employers preferably make hiring or promoting decisions favorably for [Page 553]individuals possessing diplomas or degrees over those without such credentials just because they have a degree, diploma, or certificate. Possession of a degree provides individuals the advantage of signaling to their prospective employer that they are more productive. This signaling effect is widely known as a sheepskin effect, the extra advantage coming out of the degree or diploma (the sheepskin!). Diploma effects remain an intriguing subject ...