The sheepskin effect is the hypothesis that the awarding of an educational degree (which was traditional accompanied by a certificate made of parchment) would yield a higher income than the same amount of studying without possession of a certificate. There are many applied economics papers investigating the signalling effect of the possession of such a certificate.
Newer evidence suggests that sheepskin effect exists but could be contingent on the type of degrees - Associate's or Bachelor's degrees - got.
References
Sheepskin effect Wikipedia(Text) CC BY-SA