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Are school-provided skills useful at work? Results of the Wiles test

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  • Liwiński, Jacek
  • Pastore, Francesco

Abstract

We test for the signalling hypothesis versus human capital theory using the Wiles test (1974) in a country which has experienced a dramatic increase in the supply of skills. For this purpose, we construct a job match index based on the usefulness of the school-provided skills and the relevance of the job performed to the field of study. Then we regress the first earnings of graduates on this index using OLS and Heckit to control for omitted heterogeneity of the employed. The data we use come from a representative tracer survey of Poles who left secondary schools or graduated from HEIs over the period of 1998-2005. We find that only the HEI graduates obtain a wage premium from skills acquired in the course of formal education. This finding is robust to a large number of robustness checks with different indicators of the educational mismatch and instrumental variables.

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  • Liwiński, Jacek & Pastore, Francesco, 2017. "Are school-provided skills useful at work? Results of the Wiles test," GLO Discussion Paper Series 151, Global Labor Organization (GLO).
    • Handle: RePEc:zbw:glodps:151
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    More about this item

    Keywords

    education; skills; signalling; job matching; wages; Heckman correction;
    All these keywords.

    JEL classification:

    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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