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Education, Dynamic Signaling and Social Distance

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  • Gallice, Andrea

Abstract

The paper enriches a standard signaling model of education with issues of social distance defined over educational achievements. More specifically it considers the effects that the presence of conformist and status seeking individuals has on educational dynamics. Under very reasonable assumptions about the composition of the society, the model endogenously displays a growing average level of schooling. As education rises, signals get noisy and potentially harmful for what concerns firms' profitability. Firms, in order to adjust their screening process, react with an increase of their educational requirements. All these dynamics are in line with recent trends and other stylized facts about education.

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File URL: http://epub.ub.uni-muenchen.de/1364/1/Gallice_-_Education_-_Munich_DP.pdf
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Bibliographic Info

Paper provided by University of Munich, Department of Economics in its series Discussion Papers in Economics with number 1364.

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Date of creation: Jan 2007
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Handle: RePEc:lmu:muenec:1364

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Keywords: education; signaling; status seeking; conformist behaviour.;

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References

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  1. In-Koo Cho & David M. Kreps, 1997. "Signaling Games and Stable Equilibria," Levine's Working Paper Archive 896, David K. Levine.
  2. Gianna Claudia Giannelli & Chiara Monfardini, 2001. "JOINT DECISIONS ON HOUSEHOLD MEMBERSHIP AND HUMAN CAPITAL ACCUMULATION OF YOUTHS The role of expected earnings and local markets," CHILD Working Papers wp02_01, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
  3. Armin Falk & Andrea Ichino, 2003. "Clean evidence on peer pressure," Natural Field Experiments 00239, The Field Experiments Website.
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  10. Psacharopoulos, George & Patrinos, Harry Anthony, 2002. "Returns to investment in education : a further update," Policy Research Working Paper Series 2881, The World Bank.
  11. Ed Hopkins & Tatiana Kornienko, 2004. "Running to Keep in the Same Place: Consumer Choice as a Game of Status," American Economic Review, American Economic Association, vol. 94(4), pages 1085-1107, September.
  12. Dellas, Harris & Sakellaris, Plutarchos, 1996. "On the cyclicality of schooling: Theory and evidence," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 1997002, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  13. Spence, A Michael, 1973. "Job Market Signaling," The Quarterly Journal of Economics, MIT Press, vol. 87(3), pages 355-74, August.
  14. George A. Akerlof, 1997. "Social Distance and Social Decisions," Econometrica, Econometric Society, vol. 65(5), pages 1005-1028, September.
  15. Bernheim, B Douglas, 1994. "A Theory of Conformity," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 841-77, October.
  16. Robson, Arthur J, 1992. "Status, the Distribution of Wealth, Private and Social Attitudes to Risk," Econometrica, Econometric Society, vol. 60(4), pages 837-57, July.
  17. John G. Riley, 2001. "Silver Signals: Twenty-Five Years of Screening and Signaling," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 432-478, June.
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Cited by:
  1. Chia-Hui Chen, 2012. "Type composition, career concerns, and signaling efforts," Theory and Decision, Springer, vol. 73(3), pages 401-422, September.

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