1.NounThe theory that people who have completed an academic degree earn more income, not because of the knowledge they gained during their education, but rather because their degree indicates the possession of mental abilities and personality traits that employers are seeking."The sheepskin effect represents a proxy measure, or the quest for a proxy measure, to detect such things as self-discipline, learning ability, aptitude for passing tests, ability to collaborate in peer groups, and so on, as well as, perhaps, willingness to conform."