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The Speed of Employer Learning and Job Market Signaling Revisited

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  • Habermalz, Steffen

    ()
    (Northwestern University)

Abstract

This paper discusses the claim made in Altonji and Pierret (1997) and Lange (2005) that a high speed of employer learning indicates a low value of job market signaling. The claim is first discussed intuitively in light of Spence’s original model and then evaluated in a simple extension of a model developed in Altonji and Pierret (1997). The analysis provided indicates that, if employer learning is incomplete, a high speed of employer learning is not necessarily indicative of a low value of job market signaling.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2309.

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Length: 17 pages
Date of creation: Sep 2006
Date of revision:
Publication status: published in: Applied Economics Letters, 2011, 18 (7), 607-610
Handle: RePEc:iza:izadps:dp2309

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Keywords: employer learning; signaling;

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References

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  1. Joseph E. Stiglitz, 1973. "The Theory of 'Screening', Education, and the Distribution of Income," Cowles Foundation Discussion Papers, Cowles Foundation for Research in Economics, Yale University 354, Cowles Foundation for Research in Economics, Yale University.
  2. Joseph G. Altonji & Charles R. Pierret, . "Employer Learning and Statistical Discrimination," IPR working papers 97-18, Institute for Policy Resarch at Northwestern University.
  3. Henry S. Farber & Robert Gibbons, 1994. "Learning and Wage Dynamics," Working Papers 707, Princeton University, Department of Economics, Industrial Relations Section..
  4. Spence, A Michael, 1973. "Job Market Signaling," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 87(3), pages 355-74, August.
  5. Akerlof, George A, 1970. "The Market for 'Lemons': Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 84(3), pages 488-500, August.
  6. Fabian Lange, 2007. "The Speed of Employer Learning," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 25, pages 1-35.
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Cited by:
  1. Theodore Koutmeridis, 2013. "The Market for "Rough Diamonds": Information, Finance and Wage Inequality," CDMA Working Paper Series, Centre for Dynamic Macroeconomic Analysis 201307, Centre for Dynamic Macroeconomic Analysis, revised 14 Oct 2013.
  2. Hornig, Stephan O. & Rottmann, Horst & Wapler, Rüdiger, 2011. "Sorting on the labour market: A literature overview and theoretical framework," OTH im Dialog: Weidener Diskussionspapiere 27, University of Applied Sciences Amberg-Weiden (OTH).
  3. Alós-Ferrer, Carlos & Prat, Julien, 2008. "Job Market Signaling and Employer Learning," IZA Discussion Papers 3285, Institute for the Study of Labor (IZA).
  4. Theodore Koutmeridis, 2013. "The Market for "Rough Diamonds": Information, Finance and Wage Inequality," Discussion Paper Series, Department of Economics, Department of Economics, University of St. Andrews 201307, Department of Economics, University of St. Andrews, revised 14 Oct 2013.

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