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Educational Screening and Occupational Earnings

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  • Edward N. Wolff
  • Joel Hay

Abstract

The educational screening hypothesis states that beyond a certain point schooling functions as a signaling device to identify pre-existing talents. We test for the presence of screening by comparing the schooling and earnings of self-employed workers and of those employed by others in a sample set of occupations. We expect those employed by others to pursue additional schooling to signal prospective employers. We expect self-employed managers to acquire no additional schooling for signaling purposes. We expect other self-employed workers to obtain additional schooling to signal potential customers. Our empirical results, based on 1970 Census data, strongly support the case for screening. However, the relative magnitude of the screening portion of schooling is relatively modest, lying between approximately 5 and 10 percent.

Suggested Citation

  • Edward N. Wolff & Joel Hay, 1977. "Educational Screening and Occupational Earnings," NBER Working Papers 0174, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:0174
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    References listed on IDEAS

    as
    1. Edward N. Wolff, 1977. "Schooling And Occupational Earnings," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 23(3), pages 259-278, September.
    2. Wise, David A, 1975. "Academic Achievement and Job Performance," American Economic Review, American Economic Association, vol. 65(3), pages 350-366, June.
    3. Edward N. Wolff & Dennis M. Bushe, 1976. "Age, Education and Occupational Earnings Inequality," NBER Working Papers 0149, National Bureau of Economic Research, Inc.
    4. Kenneth Wolpin, 1975. "Education and Screening," NBER Working Papers 0102, National Bureau of Economic Research, Inc.
    5. repec:bla:revinw:v:23:y:1977:i:3:p:259-78 is not listed on IDEAS
    6. R. S. Eckaus, 1973. "Estimation of the Returns to Education with Hourly Standardized Incomes," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 87(1), pages 121-131.
    7. Lazear, Edward, 1977. "Academic Achievement and Job Performance: Note," American Economic Review, American Economic Association, vol. 67(2), pages 252-254, March.
    8. Arrow, Kenneth J., 1973. "Higher education as a filter," Journal of Public Economics, Elsevier, vol. 2(3), pages 193-216, July.
    9. Taubman, Paul J & Wales, Terence J, 1973. "Higher Education, Mental Ability, and Screening," Journal of Political Economy, University of Chicago Press, vol. 81(1), pages 28-55, Jan.-Feb..
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