M. Spence. Job market signaling. The Quarterly Journal of Economics, 87(3):355--374, August 1973. Home/Search Document Not in Database Summary Related Articles Check |
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Why is the U.S. Unemployment Rate So Much Lower? - Shimer (1998) (3 citations) (Correct)
....this as a demographic reduction in unemployment, and an o#setting genuine increase, and so is misleading. Second, the fact that more educated workers tend to be more skilled does not imply that increases in education raise the skill level of the labor force. This point is crystallized by Spence s (1973) job market signaling model. If education is more costly for low ability workers, it may be used to indicate ability to future employers, and hence may be undertaken even if it conveys no direct benefit. Changes in the cost of education or the return to ability may then alter workers education ....
....unemployment has increased for both groups. A demographic adjustment would mistake this for a genuine increase in unemployment o#set by a demographic decline. The fact that ability is unobservable leads to a further bias in the demographically adjusted unemployment rate. Education as a Signal Spence s (1973) signaling model a#ords an extreme case where education has no e#ect on skills, and so a change in the education distribution has no e#ect on the value of a vacancy. 29 People pay the high cost of a college degree and forgo years of labor income, because if they did not use this costly signal, ....
Spence, M. (1973): "Job Market Signaling," Quarterly Journal of Economics, 87(3), 355--374.
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....pay workers with education level s the average product of group s.Inthis environment, just as in the human capital framework, people choose the education level that maximizes their lifetime wealth. 6 The framework presented in this section is a generalization of the standard signaling model (Spence 1973 and Stiglitz 1975) The model allows for three schooling choices (s) drop out of high school (d) graduate from high school (h) or enroll in university (u) and schooling costs (C s ( that are decreasing in ability and increasing in educational designation. 7 Within this framework, there ....
Spence, Michael A. (1973), \Job Market Signaling," Quarterly Journal of Economics,87: 355-374.
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....5 See also Cornell and Welch (1996) for a similar result with a somewhat more formal model of the information arrival process. Cornell and Welch also present a discussion of why culture matters in the screening process. 6 Signals are assumed immutable, so they correspond in the terminology of Spence (1973) to indices. 7 Nothing changes if we allow the probability q to be different for high signals than for low signals. 6probability of meeting a partner who emits signal l is pl HS ; the probability of meeting a partner of ability type t is pt HS . The probability of observing a type t ....
Spence, Michael, "Job Market Signaling," Quarterly Journal of Economics, 1973, 87, 355-374.
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M. Spence. Job market signaling. The Quarterly Journal of Economics, 87(3):355--374, August 1973.
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J. M. Spence. Job market signaling. Quarterly Journal of Economics, 87:296--332, 1973.
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