Education and Job market signalling: How robust is the nexus?
AbstractIn this paper the Signalling approach to the explanation of wage differentials is analysed in a critical way. Departing from the classic Spence's model, the article shows how the introduction of inequalities in accessing to education leads to separating equilibria characterised by redistributive effects among workers and firms, with lower wages for high skill workers respect to the traditional model. Moreover pooling equilibria can also exist as effect of such inequalities; in this case a unique wage exists for all types of workers, operating as a redistributive effect from high-skill to low-skill workers.
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Bibliographic InfoPaper provided by University of Rome La Sapienza, Department of Public Economics in its series Working Papers with number 35.
Date of creation: Jan 1999
Date of revision:
Signalling; Human Capital; Inequality.;
Find related papers by JEL classification:
- D30 - Microeconomics - - Distribution - - - General
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
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