Signalling and Self-Insight in the Job Market
AbstractThe allocation of talent in a society is an important determinant of productivity and growth. I study the informational role of education on the allocation of talent in a two-sector model where education provides workers information about their abilities. When workers and firms are equally ignorant about the abilities of a worker the unique equilibrium (Pareto-efficient) induces the mediocre to educate, while the least and the most able skip education. When workers know more than firms about their abilities, the equilibrium set expands to include equilibria where education serves as a signal. Signaling is consistent with both the most able educating, but also with the mediocre educating, and the most able skipping education.
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Bibliographic InfoPaper provided by Tel Aviv in its series Papers with number 2-99.
Length: 28 pages
Date of creation: 1999
Date of revision:
Contact details of provider:
Postal: Israel TEL-AVIV UNIVERSITY, THE FOERDER INSTITUTE FOR ECONOMIC RESEARCH, RAMAT AVIV 69 978 TEL AVIV ISRAEL.
Web page: http://econ.tau.ac.il/research/foerder.asp
More information through EDIRC
EDUCATION ; LABOUR MARKET ; HUMAN CAPITAL ; INFORMATION;
Find related papers by JEL classification:
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- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
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- I20 - Health, Education, and Welfare - - Education - - - General
- I28 - Health, Education, and Welfare - - Education - - - Government Policy
- J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
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