The sheepskin effect (named for the vellum on which diplomas were traditionally written)[1] is a phenomenon in applied economics observing that people possessing a completed academic degree earn a greater income than people who have an equivalent amount of studying without possessing an academic degree.
[2] There are many applied economics papers which investigate the signaling effect of possession of such an academic degree.
Research into the sheepskin effect can be divided into studies of explicit degree effects and, because many of the useful data sets don't explicitly report degrees, studies with no explicit degree measures.
[3] A review of a quarter century of quantitative studies of both kinds finds consistent evidence of the sheepskin effect in all but a few studies.
An analysis of data from the massive General Social Survey indicates that over 60% of the economic benefit of an education comes from the actual degree rather than the years or credits earned - especially in high school and college.