Abstrakt: We test whether human capital can explain returns to higher education. We leverage exogeneous variation in the number of study points for identical degrees to shut down the signalling channel for returns to higher education. We make use of the retro-active implementation of the Bologna reform in Norway, where students already enrolled received degrees with lower point requirements and graduated with overshooting study points compared to the following cohort. We partially identify the effect of human capital through bounds analysis. This allows us to address the two main challenges to our causal design, post-treatment degree switches and transition provisions allowing for traditional degrees in select cases. We estimate non-negative rewards for a reform-induced extra semester of education, indicating that pure signalling cannot explain returns to higher education.
