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A Signaling Model of University Selection

Author

Listed:
  • Ivan Anic
  • Vladimir Bozin
  • Branko Uroševic

Abstract

We propose a signaling model of student enrollment dynamics based on probabilities of completion of studies, under different rationality assumptions. There are two types of students and two schools. School of graduation serves as a signal of student productivity to prospective employers. The benchmark case is when both students and employers are rational. We, then, relax rationality assumptions and show that, while intermediate dynamics becomes more complex, possible long run equilibria stay essentially the same. Importantly, comparative statics can be quite surprising and differ significantly from the full rationality case.

Suggested Citation

  • Ivan Anic & Vladimir Bozin & Branko Uroševic, 2016. "A Signaling Model of University Selection," CESifo Working Paper Series 5741, CESifo.
    • Handle: RePEc:ces:ceswps:_5741
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    References listed on IDEAS

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    More about this item

    Keywords

    job market signaling; university selection; enrolment dynamics; dropout rate;
    All these keywords.

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations

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