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Educational Screening and Occupational Earnings

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Author Info
Edward N. Wolff
Joel Hay

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Abstract

The educational screening hypothesis states that beyond a certain point schooling functions as a signaling device to identify pre-existing talents. We test for the presence of screening by comparing the schooling and earnings of self-employed workers and of those employed by others in a sample set of occupations. We expect those employed by others to pursue additional schooling to signal prospective employers. We expect self-employed managers to acquire no additional schooling for signaling purposes. We expect other self-employed workers to obtain additional schooling to signal potential customers. Our empirical results, based on 1970 Census data, strongly support the case for screening. However, the relative magnitude of the screening portion of schooling is relatively modest, lying between approximately 5 and 10 percent.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 0174.

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Date of creation: Apr 1977
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Handle: RePEc:nbr:nberwo:0174

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  1. Kenneth Wolpin, 1975. "Education and Screening," NBER Working Papers 0102, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  2. Wolff, Edward N, 1977. "Schooling and Occupational Earnings," Review of Income and Wealth, Blackwell Publishing, vol. 23(3), pages 259-78, September.
  3. Arrow, Kenneth J., 1973. "Higher education as a filter," Journal of Public Economics, Elsevier, vol. 2(3), pages 193-216, July. [Downloadable!] (restricted)
  4. Wise, David A, 1975. "Academic Achievement and Job Performance," American Economic Review, American Economic Association, vol. 65(3), pages 350-66, June. [Downloadable!] (restricted)
  5. Taubman, Paul J & Wales, Terence J, 1973. "Higher Education, Mental Ability, and Screening," Journal of Political Economy, University of Chicago Press, vol. 81(1), pages 28-55, Jan.-Feb.. [Downloadable!] (restricted)
  6. Eckaus, Richard S, 1973. "Estimation of the Returns to Education with Hourly Standardized Incomes," The Quarterly Journal of Economics, MIT Press, vol. 87(1), pages 121-31, February. [Downloadable!] (restricted)
  7. Lazear, Edward, 1977. "Academic Achievement and Job Performance: Note," American Economic Review, American Economic Association, vol. 67(2), pages 252-54, March. [Downloadable!] (restricted)
  8. Edward N. Wolff & Dennis M. Bushe, 1976. "Age, Education and Occupational Earnings Inequality," NBER Working Papers 0149, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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