Is the Effect of Grades on Early Career Income General or Conditional?

This study used a national sample of college students followed-up nine years after initial enrollment to estimate the impact of college grades on early career earnings. The study produced three major findings: (1) The net positive impact of grades on earnings is substantially greater for black men than for white. (2) The impact of grades is not conditioned by differences in college selectivity, college major, college race, job type or type of employing organization. (3) Direct effects alone underestimate the total positive impact of grades on earnings by as much as a third for black and white women. For these two groups, a substantial part of the positive impact of grades is indirect, transmitted through educational attainment and job type.