The Impact of Higher Education on Employer Perceptions

Why do employers seek to attract individuals with more education? We experimentally vary rates of master degree completion on applicant r´esum´es to shift employer beliefs about candidates’ productive traits. Our results confirm
that a master’s degree raises candidate desirability. Moreover, we find that master graduates outperform bachelor degree holders in terms of employer perceived cognitive and non-cognitive traits as well as subject matter expertise. Conversely, master dropouts are associated with weaker non-cognitive traits. Notably, these perceived traits account for up to 75% of candidate attractiveness. This paper thus provides causal evidence on the origins of the education premium.