Education, Dynamic Signaling and Social Distance
AbstractThe 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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Bibliographic InfoPaper provided by University of Munich, Department of Economics in its series Discussion Papers in Economics with number 1364.
Date of creation: Jan 2007
Date of revision:
education; signaling; status seeking; conformist behaviour.;
Other versions of this item:
- Andrea Gallice, 2009. "Education, dynamic signalling, and social distance," Oxford Economic Papers, Oxford University Press, vol. 61(2), pages 304-326, April.
- I20 - Health, Education, and Welfare - - Education - - - General
- D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
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