Eleonora Brandimarti (University of Geneva)

Self-Selection, University Courses and Returns to Advanced Degrees

Abstract. Higher education often requires choosing a bachelor’s and a master’s degree, yet we know little about the returns of these combined choices and the role of courses in different disciplines. This paper addresses this gap using detailed data on Italian graduates and university programs. I study the labor market returns to combinations of bachelor’s and master’s degrees and investigate how the characteristics of the curriculum affect outcomes. I exploit exogenous variation in access to bachelor’s and master’s degrees to causally estimate the returns to 41 combinations of degrees. I organize the data in a nested model with exogenous variation in admission requirements and investigate the preference profile of the sample through policy simulations that shift such requirements. I then relate the estimated returns to the academic curriculum of degrees to examine the role of quantitative education. I contribute to the literature on returns to advanced degrees by incorporating master’s degrees in the discussion on how higher education affects outcomes and providing evidence on the characteristics of curricula that are positively related to labor market returns. I find that returns to degree combinations vary substantially even for combinations of degrees with the same bachelor’s, suggesting that both types of programs require consideration. Combinations of degrees in different disciplines relate positively to economic outcomes, while combinations in the same field perform worse. Successful combinations have little non-quantitative education in the master’s, and quantitative courses alone do not explain higher returns.