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A model of mixed signals with applications to countersignaling an the GED

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  • Gottlieb, Daniel
  • Moreira, Humberto Ataíde
  • Araújo, Aloísio Pessoa de

Abstract

We develop a job-market signaling model where signals may convey two pieces of information. This model is employed to study the GED exam and countersignaling (signals non-monotonic in ability). A result of the model is that countersignaling is more expected to occur in jobs that require a combination of skills that differs from the combination used in the schooling process. The model also produces testable implications consistent with evidence on the GED: (i) it signals both high cognitive and low non-cognitive skills and (ii) it does not affect wages. Additionally, it suggests modifications that would make the GED a more signal.

Suggested Citation

  • Gottlieb, Daniel & Moreira, Humberto Ataíde & Araújo, Aloísio Pessoa de, 2004. "A model of mixed signals with applications to countersignaling an the GED," FGV/EPGE Economics Working Papers (Ensaios Economicos da EPGE) 553, FGV/EPGE - Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
  • Handle: RePEc:fgv:epgewp:553
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    References listed on IDEAS

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    1. Engers, Maxim, 1987. "Signalling with Many Signals," Econometrica, Econometric Society, vol. 55(3), pages 663-674, May.
    2. Nick Feltovich & Richmond Harbaugh & Ted To, 2002. "Too Cool for School? Signalling and Countersignalling," RAND Journal of Economics, The RAND Corporation, vol. 33(4), pages 630-649, Winter.
    3. Spence, Michael, 1974. "Competitive and optimal responses to signals: An analysis of efficiency and distribution," Journal of Economic Theory, Elsevier, vol. 7(3), pages 296-332, March.
    4. Carneiro, Pedro & Heckman, James J., 2003. "Human Capital Policy," IZA Discussion Papers 821, Institute for the Study of Labor (IZA).
    5. Araujo, Aloisio & Moreira, Humberto, 2010. "Adverse selection problems without the Spence-Mirrlees condition," Journal of Economic Theory, Elsevier, vol. 145(3), pages 1113-1141, May.
    6. Cameron, Stephen V & Heckman, James J, 1993. "The Nonequivalence of High School Equivalents," Journal of Labor Economics, University of Chicago Press, vol. 11(1), pages 1-47, January.
    7. Riley, John G, 1979. "Informational Equilibrium," Econometrica, Econometric Society, vol. 47(2), pages 331-359, March.
    8. Tsuchida, Marcos H. & Araújo, Aloísio Pessoa de & Moreira, Humberto Ataíde, 2004. "Do dividends signal more earnings?," FGV/EPGE Economics Working Papers (Ensaios Economicos da EPGE) 524, FGV/EPGE - Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    9. Drazen, Allan & Hubrich, Stefan, 2003. "Mixed Signals in Defending the Exchange Rate: What do the Data Say?," CEPR Discussion Papers 4050, C.E.P.R. Discussion Papers.
    10. Roger Klein & Richard Spady & Andrew Weiss, 1991. "Factors Affecting the Output and Quit Propensities of Production Workers," Review of Economic Studies, Oxford University Press, vol. 58(5), pages 929-953.
    11. Quinzii, Martine & Rochet, Jean-Charles, 1985. "Multidimensional signalling," Journal of Mathematical Economics, Elsevier, vol. 14(3), pages 261-284, June.
    12. Yona Rubinstein & James J. Heckman, 2001. "The Importance of Noncognitive Skills: Lessons from the GED Testing Program," American Economic Review, American Economic Association, vol. 91(2), pages 145-149, May.
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    Citations

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    Cited by:

    1. James J. Heckman & Jora Stixrud & Sergio Urzua, 2006. "The Effects of Cognitive and Noncognitive Abilities on Labor Market Outcomes and Social Behavior," Journal of Labor Economics, University of Chicago Press, vol. 24(3), pages 411-482, July.
    2. Philipp Sadowski, 2011. "Overeagerness," Levine's Working Paper Archive 661465000000001198, David K. Levine.
    3. Jean Tirole & Roland Bénabou, 2006. "Incentives and Prosocial Behavior," American Economic Review, American Economic Association, vol. 96(5), pages 1652-1678, December.
    4. Athayde, Gustavo M. de & Flôres Junior, Renato Galvão, 2004. "Do higher moments really matter in portfolio choice?," FGV/EPGE Economics Working Papers (Ensaios Economicos da EPGE) 574, FGV/EPGE - Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    5. Baojun Jiang & Kinshuk Jerath & Kannan Srinivasan, 2011. "Firm Strategies in the "Mid Tail" of Platform-Based Retailing," Marketing Science, INFORMS, vol. 30(5), pages 757-775, September.
    6. Flôres Junior, Renato Galvão, 2004. "On the use (fulness) of CGE modelling in trade negotiations and policy," FGV/EPGE Economics Working Papers (Ensaios Economicos da EPGE) 564, FGV/EPGE - Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    7. Moreira, Humberto Ataíde & Araújo, Aloísio Pessoa de & Castro Filho, Luciano I. de, 2004. "Pure strategy equilibria of multidimensional and non-monotonic auctions," FGV/EPGE Economics Working Papers (Ensaios Economicos da EPGE) 571, FGV/EPGE - Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    8. Fernando Barbosa & Alexandre Cunha & Elvia Sallum, 2006. "Competitive equilibrium hyperinflation under rational expectations," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 29(1), pages 181-195, September.
    9. Daniel Gottlieb & Kent Smetters, 2011. "Grade Non-Disclosure," NBER Working Papers 17465, National Bureau of Economic Research, Inc.
    10. repec:pri:wwseco:dp230 is not listed on IDEAS
    11. Eduardo de Carvalho Andrade & Luciano I. de Castro, 2008. "Tougher Educational Exam Leading to Worse Selection," Discussion Papers 1469, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    12. Eduardo Andrade & Luciano De Castro, 2010. "Tougher Educational Exam Leading to Worse Selection," Discussion Papers 1533, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    13. Yi-Chun Chen & Siyang Xiong, 2008. "Topologies on Types: Connections," Discussion Papers 1470, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    14. Horowitz, Andrew W. & Flôres Junior, Renato Galvão, 2004. "Beyond indifferent players: on the existence of prisoners dilemmas in games with amicable and adversarial preferences," FGV/EPGE Economics Working Papers (Ensaios Economicos da EPGE) 576, FGV/EPGE - Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    15. de Carvalho Andrade, Eduardo & de Castro, Luciano I., 2011. "Tougher educational exam leading to worse selection," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 5, pages 1-24.

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