Kolloquium: The Role of Firms in Shaping the Work, Study, and Graduation Choices of Student Employees

Abstract:
How do firms affect the academic outcomes of their student employees? As in many European countries, a majority of Finnish students work during the school year, often in full-timepositions. Yet, policies and financial incentives targeting on-time graduation are almost exclusively geared towards individuals and universities, overlooking the role of employers. Using university grade records linked to employer-employee data for student employees, this paper estimates firm-specific fixed effects for student employee wages, credits, and grades. The findings reveal systematic differences in the magnitude of firm effects across industries, employer size, ownership type and other firm characteristics. Limitedmobility bias-corrected estimates indicate that firm-fixed effects explain a large share of the variance in full-time student employee wagesand a nontrivial share of their credit accumulation. In turn, firm credits fixed effects are strongly negatively correlated with the share of late graduates among firms' student employees. These results suggest that firms play a meaningful role in shaping student outcomes and should be considered in the policy mix supporting on-timegraduation and student success morebroadly.