Essay Example on The years spent in college are arguably the most important years









Most students will agree that their years spent in college are arguably the most important years of their lives ultimately shaping their futures All in all it is near impossible to determine what aspects of college life will reap the most reward in the long run Are aptitude tests relevant Is having a high GPA important Will commendable performance at college automatically translate into a prosperous future Or are there other weighty components influencing ability to become well off Indeed education develops the intellectual abilities of a person Human beings possess a lot of potential abilities that can be enhanced through education and only proper education can pave the way and lead human beings to virtue Khostinat 2009 Education plays a central role in preparing individuals to enter the labour force as well as equipping them with the skills to engage in lifelong learning experiences Educational attainment therefore raises one s income Psacharopoulos 1993 More specific to a person s education however is their individual performance in various tests whether those be during their time in college or external aptitude tests like SATs and PIATs An individual s performance has a vast importance in policy making due to the necessity for efficient and multifarious labour forces 

It is important to understand the degree to which performance influences wage determination as it will aid targeting particular labour policies in the right direction Furthermore it is essential to analyse to what degree do other characteristics such as gender ethnicity distance from capital city and parent s education level too affect wages As we establish further in this paper these effects undeniably exist and should be carefully considered when developing future labour policies This paper studies the effects of individual natural ability performance in various avenues as well as standardized test scores in order to see what is most influential on future hourly wage The conclusive solution will act to assist current students in making crucial decisions ensuring they have the best opportunity to succeed In order to determine this solution we shall first analyse the literature on the topic providing a short motivation behind a few of the variables we have chosen Then we will present a swift data analysis highlighting the key features and oddities of the dataset Now proceeding to run a regression model we examine its strengths and possible weaknesses Finally we interpret and deliberate our results as well as potential policy implications that surface Literature Review

There have been numerous studies estimating how individual natural ability college performance and grades affect income and hence hourly wage However very few papers have studied and compared effects of the vast variety of these test types for example mathematical and verbal together in a single model Both a student s college experience and performance are governed by several components and these components are in the most part interrelated The connection between natural ability SAT PIAT scores and GPAs should be thoroughly assessed so that this solution can be beneficial to everyone This paper will develop on past research regarding the post graduation hourly wage of college students in order to establish which of these aspects is most significant Many employers use a student s GPA in order to judge job applicants It is often easier to get a good job with better grades during college Rumberger 1 997 That being said employers also look for qualities such as organisation which cannot be quantitatively measured An often important decision for most students is how they will manage their time both spent studying and in recreation

 Determining the importance of GPA in influencing a graduate s hourly wage will give students an insight on how to manage their time more effectively during college Using data from the University of Melbourne Chia and Miller 2008 examined the effects of college performance finding that the main determinant of graduates starting salaries is the weighted average mark analogous to GPA they achieve at university pg 18 The fact that the Australian labour market is similar to that in the U S proposes that a central element in what influences employers to hire is indeed college performance A typical college graduate holds little to no full time work experience and consequently can only be assessed on achievements throughout education As a result employers make use of the GPA to aid screening through hordes of job applicants This means that ultimately applicants with a superior performance in college will acquire the uppermost salaries as they are expected by employers to possess a greater potential in the workplace Chia and Miller conclude that although test scores are noteworthy they are not as significant as performance in college when it comes to determining future income 

An additional key factor relating to an individual s performance is their reasoning skill Boissiere Knight and Sabot 1985 analyse the effect of reasoning skills on income Using data from Kenya and Tanzania they conclude that cognitive skills are the most important form of human capital pg 1020 This finding implies that those with a greater natural ability have the means to acquire more human capital and consequently become much more productive in the future Knowing this having a quantitative measure of natural ability or thinking skills is imperative when studying factors affecting hourly wage The study finds that it is an individual s mathematical ability in particular that results in superior income levels Although there is evidence to suggest that the SAT is affected by human capital acquired through education it is the best existing measure for natural ability we have Therefore aptitude test scores will be reflected on greatly throughout this paper along with GPA Altogether the above research strongly supports that individual ability performance and test scores greatly affect post graduate hourly wage Hence we were motivated to examine using econometric analysis whether the above statement is true and therefore these factors will be further tested in this paper

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