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Signaling Specific Skills and the Labor Market of College Graduates

Author

Listed:
  • Busso, Matias

    (Inter-American Development Bank)

  • Montaño, Sebastián

    (University of Maryland)

  • Muñoz-Morales, Juan S.

    (IÉSEG School of Management)

Abstract

We use census-like data and a regression discontinuity design to study the labor market impacts of a signal provided by a government-sponsored award given to top-performing students on a nationwide college exit exam in Colombia. Students who can signal their high level of specific skills earn seven to ten percent more than identical students lacking such a signal. The signal allows workers to find jobs in more productive firms and sectors that better use their skills. The positive returns persist for up to five years. The signal favors workers from less advantaged groups who enter the market with weaker signals.

Suggested Citation

  • Busso, Matias & Montaño, Sebastián & Muñoz-Morales, Juan S., 2023. "Signaling Specific Skills and the Labor Market of College Graduates," IZA Discussion Papers 16449, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp16449
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    Cited by:

    1. M. Antonella Mancino, Leonardo Fabio Morales, Diego F. Salazar, 2024. "Signaling Worker Quality in a Developing Country: Lessons from a Certification Program," LCERPA Working Papers bm0143, Laurier Centre for Economic Research and Policy Analysis.
    2. M. Antonella Mancino & Leonardo Fabio Morales & Diego F. Salazar, 2023. "Signaling Worker Quality in a Developing Country: Lessons from a Certification Program," Borradores de Economia 1259, Banco de la Republica de Colombia.

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    More about this item

    Keywords

    signaling; skills; wage returns; awards; college reputation; Colombia;
    All these keywords.

    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • 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
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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