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The Speed of Employer Learning and Job Market Signaling Revisited

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  • Habermalz, Steffen

    () (University of Mannheim)

Abstract

This paper discusses the claim made in Altonji and Pierret (1997) and Lange (2005) that a high speed of employer learning indicates a low value of job market signaling. The claim is first discussed intuitively in light of Spence’s original model and then evaluated in a simple extension of a model developed in Altonji and Pierret (1997). The analysis provided indicates that, if employer learning is incomplete, a high speed of employer learning is not necessarily indicative of a low value of job market signaling.

Suggested Citation

  • Habermalz, Steffen, 2006. "The Speed of Employer Learning and Job Market Signaling Revisited," IZA Discussion Papers 2309, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp2309
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    References listed on IDEAS

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    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. 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.
    3. Alós-Ferrer, Carlos & Prat, Julien, 2012. "Job market signaling and employer learning," Journal of Economic Theory, Elsevier, vol. 147(5), pages 1787-1817.
    4. Tim Perri, 2016. "Signaling and Opitmal Sorting," Working Papers 16-07, Department of Economics, Appalachian State University.

    More about this item

    Keywords

    employer learning; signaling;

    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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