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The speed of employer learning and job market signalling revisited


  • Steffen Habermalz


This article discusses the claim made by Altonji and Pierret (AP) (1997) and Lange (2007) that a high Speed of Employer Learning (SEL) indicates a low value of Job Market Signalling (JMS). It is first discussed intuitively in the light of Spence's original model and then evaluated in a simple extension of a model developed by AP (1997). The analysis provided indicates that, if Employer Learning (EL) is incomplete, a high SEL is not necessarily indicative of a low value of JMS.

Suggested Citation

  • Steffen Habermalz, 2011. "The speed of employer learning and job market signalling revisited," Applied Economics Letters, Taylor & Francis Journals, vol. 18(7), pages 607-610.
  • Handle: RePEc:taf:apeclt:v:18:y:2011:i:7:p:607-610 DOI: 10.1080/13504851.2010.482514

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    References listed on IDEAS

    1. Henry S. Farber & Robert Gibbons, 1996. "Learning and Wage Dynamics," The Quarterly Journal of Economics, Oxford University Press, vol. 111(4), pages 1007-1047.
    2. Joseph G. Altonji & Charles R. Pierret, 2001. "Employer Learning and Statistical Discrimination," The Quarterly Journal of Economics, Oxford University Press, vol. 116(1), pages 313-350.
    3. Fabian Lange, 2007. "The Speed of Employer Learning," Journal of Labor Economics, University of Chicago Press, vol. 25, pages 1-35.
    4. Stiglitz, Joseph E, 1975. "The Theory of "Screening," Education, and the Distribution of Income," American Economic Review, American Economic Association, vol. 65(3), pages 283-300, June.
    5. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, Oxford University Press, vol. 84(3), pages 488-500.
    6. Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, Oxford University Press, vol. 87(3), pages 355-374.
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    Cited by:

    1. Hornig, Stephan O. & Rottmann, Horst & Wapler, Rüdiger, 2011. "Sorting on the labour market: A literature overview and theoretical framework," Weidener Diskussionspapiere 27, University of Applied Sciences Amberg-Weiden (OTH).
    2. Alós-Ferrer, Carlos & Prat, Julien, 2012. "Job market signaling and employer learning," Journal of Economic Theory, Elsevier, vol. 147(5), pages 1787-1817.
    3. Tim Perri, 2016. "Signaling and Opitmal Sorting," Working Papers 16-07, Department of Economics, Appalachian State University.
    4. Theodore Koutmeridis, 2013. "The Market for "Rough Diamonds": Information, Finance and Wage Inequality," CDMA Working Paper Series 201307, Centre for Dynamic Macroeconomic Analysis, revised 14 Oct 2013.

    More about this item

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts


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