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The sheepskin effect is the hypothesis that the awarding of an educational degree (which was traditionally accompanied by a certificate made of parchment) would yield a higher income than the same amount of studying without possession of a certificate. There are many applied economics papers investigating the signalling effect of the possession of such a certificate.
Newer evidence suggests that the sheepskin effect exists but could be contingent on the type of degrees - Associate's or Bachelor's degrees - obtained.
^Belman, D. and Heywood, J.S., 1991. Sheepskin effects in the returns to education: An examination of women and minorities. The Review of Economics and Statistics, pp.720-724. JSTOR: 2109413
^Hungerford, T. and Solon, G., (1987). Sheepskin effects in the returns to education. The Review of Economics and Statistics, pp.175-177. JSTOR: 1937919
^Jaeger, D., & Page, M. (1996). Degrees Matter: New Evidence on Sheepskin Effects in the Returns to Education. The Review of Economics and Statistics, 78(4), 733-740. JSTOR: 2109960 doi: 10.2307/2109960