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Web Appendix: Beyond Signaling and Human Capital: Education and the Revelation of Ability

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Author Info

  • Patrick J. Bayer
  • Peter Arcidiacono
  • Aurel Hizmo

Abstract

Appendix to working paper titled "Beyond Signaling and Human Capital: Education and the Revelation of Ability." In that paper, we provide evidence that graduating from college plays a direct role in revealing ability to the labor market. Using the NLSY79, our results suggest that ability is observed nearly perfectly for college graduates. In contrast, returns to AFQT for high school graduates are initially very close to zero and rise steeply with experience. As a result, from the very beginning of their careers, college graduates are paid in accordance with their own ability, while the wages of high school graduates are initially unrelated to their own ability. This view of ability revelation in the labor market has considerable power in explaining racial differences in wages, education, and the returns to ability.

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File URL: http://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1602025_code1070428.pdf?abstractid=1602025&mirid=1
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Bibliographic Info

Paper provided by Duke University, Department of Economics in its series Working Papers with number 10-52.

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Length: 6
Date of creation: 2010
Date of revision:
Handle: RePEc:duk:dukeec:10-52

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Postal: Department of Economics Duke University 213 Social Sciences Building Box 90097 Durham, NC 27708-0097
Phone: (919) 660-1800
Fax: (919) 684-8974
Web page: http://econ.duke.edu/

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Cited by:
  1. Roland G. Fryer , Jr. & Devah Pager & J�rg L. Spenkuch, 2013. "Racial Disparities in Job Finding and Offered Wages," Journal of Law and Economics, University of Chicago Press, vol. 56(3), pages 633 - 689.
  2. Andy Feng & Georg Graetz, 2013. "A Question of Degree: The Effects of Degree Class on Labor Market Outcomes," CEP Discussion Papers dp1221, Centre for Economic Performance, LSE.
  3. Kevin Lang & Erez Siniver, 2010. "Why Is an Elite Undergraduate Education Valuable? Evidence from Israel," Boston University - Department of Economics - Working Papers Series WP2010-017, Boston University - Department of Economics.
  4. Brad J. Hershbein, 2013. "Worker Signals among New College Graduates: The Role of Selectivity and GPA," Upjohn Working Papers and Journal Articles 13-190, W.E. Upjohn Institute for Employment Research.

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