IDEAS home Printed from https://ideas.repec.org/a/oup/oxecpp/v55y2003i2p191-215.html
   My bibliography  Save this article

A test of the signalling hypothesis

Author

Listed:
  • Monojit Chatterji
  • Paul T. Seaman
  • Larry D. Singell Jr.

Abstract

Education may enhance earnings either because of human capital increases or by signalling unobservable worker attributes. Previous tests of these alternatives relied on ad hoc distinctions between them. Our theoretical model provides a direct signal measure as the difference between required and necessary qualifications, forming the basis for an ordered-probit model of discrete differences between required and necessary qualifications that depend on firm, job, and worker attributes. Estimates support the model's predictions, providing a continuous, predicted signal measure for second-stage earnings equations. These results provide the first formal evidence of a significant, positive, gender-specific return to a signal and indicate a downward bias in the return to education from excluding the signal measure. Copyright 2003, Oxford University Press.

Suggested Citation

  • Monojit Chatterji & Paul T. Seaman & Larry D. Singell Jr., 2003. "A test of the signalling hypothesis," Oxford Economic Papers, Oxford University Press, vol. 55(2), pages 191-215, April.
  • Handle: RePEc:oup:oxecpp:v:55:y:2003:i:2:p:191-215
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sadiq, Misbah & Yousaf, Sheikh Usman & Anser, Muhammad Khalid & Rashid Khan, Haroon ur & Sriyanto, Sriyanto & Zaman, Khalid & Van Tu, Duong & Anis, Siti Nisrin Mohd, 2023. "The role of debt financing in the relationship between capital structure, firm’s value, and macroeconomic factors: To throw caution to the wind," The Quarterly Review of Economics and Finance, Elsevier, vol. 87(C), pages 212-223.
    2. Ingrid Linsley, 2005. "Overeducation in the Australian Labour Market : Its Incidence and Effects," Department of Economics - Working Papers Series 939, The University of Melbourne.
    3. Hao, Zedong & Wang, Yun, 2022. "Education signaling, effort investments, and the market's expectations: Theory and experiment on China's higher education expansion," China Economic Review, Elsevier, vol. 75(C).
    4. Perri, Timothy J., 2002. "Signaling versus contingent contracts with costly turnover," Journal of Economic Behavior & Organization, Elsevier, vol. 48(4), pages 365-374, August.
    5. Monojit Chatterji, 2008. "Education and Economic Development in India," Dundee Discussion Papers in Economics 210, Economic Studies, University of Dundee.
    6. Ssekabira Ntege & Steven F. Koch, 2008. "Returns to Schooling: Skills Accumulation or Information Revelation?," Working Papers 087, Economic Research Southern Africa.
    7. Skalli, Ali, 2007. "Are successive investments in education equally worthwhile? Endogenous schooling decisions and non-linearities in the earnings-schooling relationship," Economics of Education Review, Elsevier, vol. 26(2), pages 215-231, April.
    8. NAKAMURO Makiko & INUI Tomohiko, 2013. "The Returns to College Quality in Japan: Does Your College Choice Affect Your Earnings?," ESRI Discussion paper series 306, Economic and Social Research Institute (ESRI).
    9. Chatterji, Monojit, 2008. "Education and Economic Development in India," SIRE Discussion Papers 2008-12, Scottish Institute for Research in Economics (SIRE).
    10. Andrews, Martyn J. & Bradley, Steve & Upward, Richard, 2001. "Estimating the probability of a match using microeconomic data for the youth labour market," Labour Economics, Elsevier, vol. 8(3), pages 335-357, June.
    11. Garcia-Mainar, Inmaculada & Montuenga, Victor M., 2019. "The signalling role of over-education and qualifications mismatch," Journal of Policy Modeling, Elsevier, vol. 41(1), pages 99-119.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:oxecpp:v:55:y:2003:i:2:p:191-215. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://academic.oup.com/oep .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.