The graduate: spillovers from the entry of the first worker with a college degree in a firm

Abstract

In this thesis a large panel of data on Portuguese workers is used to estimate the effect of the entry of the first graduate in a firm in his colleagues’ productivity. Propensity Score Matching is the methodology used and robustness tests are also presented to reinforce the credibility of the results. A spillover of approximately 5.10% is found, which means that the hiring of the first college graduate is an important stage in the development of a firm which benefits all workers. It is also shown that small firms benefit more from the entry of the first college graduate, specifically, firms with 5 or less employees had a spillover effect of around 9.63%.