Organizational Sorting, Compensation Inequality, and Occupational Stratification in Experiential Learning

• In Event: Education and Labor Markets

Abstract

Elite employers prefer graduates from prestigious institutions, yet this emphasis on between-institution differences obscures how students within the same university are funneled into unequal labor market positions. We theorize experiential learning—cooperative education embedded in degree programs—as a key site where organizational sorting, credential signaling, and ascriptive inequality generate stratified opportunities. We ask: (1) To what extent does within-institution channeling into differentiated organizational contexts reflect students’ social backgrounds versus academic credentials? (2) How do student characteristics, academic achievements, and employer attributes jointly shape compensation during experiential learning? (3) What factors determine access to positions with higher long-run earnings potential, and how do these patterns vary across organizational settings? We analyze administrative records from a highly selective private research university where nearly all undergraduates complete 4–7 month co-op placements. The sample includes 46,500 first-time undergraduates (2017–2025) and 5,160 employers, linking demographics, prior achievement, college level factors, to detailed placement data (employer, occupation, location, pay). We find that sorting into elite private firms is structured by gender and race, and only partially mediated by college major. At the same time, major remains one of the strongest determinants of assignment to elite employers. Employer-level context accounts for roughly 76% of variance in compensation, with placements in top-tier S&P 500 firms generating earnings premiums that far exceed any individual-level characteristic. College major is a central mechanism of both organizational placement and pay differentiation, amplifying sectoral wage gaps. Men and White students disproportionately access higher-ranked occupations, whereas GPA, honors participation, and double majors play a more substantial role in shaping occupational rank than in influencing compensation. Taken together, these results show that even when institutional prestige is held constant, field of study, ascriptive traits, and employer contexts combine to produce significant inequalities in labor market access, earnings, and occupational positioning.

Authors

• Oded Mcdossi, University of Haifa

• Geffen Ben David, University of Haifa