The German initiative of excellence was the most far-reaching political measure in university funding–a shift from an equal distribution of funds, rooted in Humboldt’s tradition, to large-scale merit-based funding. Recent studies have examined the question how the initiative has affected (in)equality in university funding; but as yet little is known about effects on graduates’ monetary returns for university degrees. We analyse whether a degree from a ‘university of excellence’ leads to a wage premium at labour market entry. (...)