Abstract

Scams involving university degrees are flourishing in many emerging markets. Using a resume experiment in India, this paper studies the impact of gray degrees, or potentially bought academic credentials from questionable universities, on callback rates to job applications. The experiment varied the type of degree (no, gray, and authentic) in online applications to entry-level jobs that require no university qualification. We find that gray degrees increase callback rates by 42 percent or 8 percentage points relative to having no degree. However, we also document that gray degrees fare on average worse than authentic degrees. These empirical patterns are consistent with a model where employers have beliefs about the authenticity of degrees and are discounting gray-degree universities probabilistically. We discuss our findings with respect to the Indian context.

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