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Human Capital Versus Signaling Models: University Access and High School Drop-outs

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  • Kelly Bedard

Abstract

Under the educational sorting hypothesis, an environment in which some individuals are constrained from entering university will be characterized by increased pooling at the high school graduation level, as compared to an environment with greater university access. This results because some potential high school drop-outs and university enrollees choose the high school graduate designation in order to take advantage of high ability individuals who are constrained from entering university. This is in stark contrast to human capital theory which predicts higher university enrollment, but identical high school drop-out rates in regions with greater university access. Using NLSYM and NLSYW education data from the late 1960s and early 1970s, I find that labor markets that contain a university have higher high school drop-out rates.

Suggested Citation

  • Kelly Bedard, "undated". "Human Capital Versus Signaling Models: University Access and High School Drop-outs," Canadian International Labour Network Working Papers 19, McMaster University.
  • Handle: RePEc:mcm:cilnwp:19
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    References listed on IDEAS

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    1. Kevin Lang & David Kropp, 1986. "Human Capital Versus Sorting: The Effects of Compulsory Attendance Laws," The Quarterly Journal of Economics, Oxford University Press, vol. 101(3), pages 609-624.
    2. Michael Rothschild & Joseph Stiglitz, 1976. "Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information," The Quarterly Journal of Economics, Oxford University Press, vol. 90(4), pages 629-649.
    3. Wolpin, Kenneth I, 1977. "Education and Screening," American Economic Review, American Economic Association, vol. 67(5), pages 949-958, December.
    4. Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, Oxford University Press, vol. 87(3), pages 355-374.
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    JEL classification:

    • I2 - Health, Education, and Welfare - - Education
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities

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