Education, Signaling, and Wage Inequality in a Dynamic Economy
Many empirical works suggest that education has a positive effect on earnings not only because it raises human capital but also because it functions as a signal when employers have incomplete information on employees' skills. The signaling role could have important consequences on the dynamics of education, wages, and wage distribution when there exist intergenerational linkages in educational decisions. This paper examines the dynamic effects in an economy where education has the dual roles and some fraction of individuals is credit constrained from taking education. In particular, it investigates how the number of educated individuals, the importance of the signaling value of education, and the wage inequality between educated and uneducated workers change over time in such economy, and compares the dynamics with those when education does not function as a signal. It also examines whether the signaling role leads to higher aggregate consumption or not in the long run.
|Date of creation:||Jul 2009|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://mpra.ub.uni-muenchen.de
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Galor, Oded & Zeira, Joseph, 1988.
"Income Distribution and Macroeconomics,"
51644, University Library of Munich, Germany, revised 01 Sep 1989.
- Yuki, Kazuhiro, 2007.
"Sectoral Shift, Wealth Distribution, and Development,"
3384, University Library of Munich, Germany.
- Yuki, Kazuhiro, 2008. "Sectoral Shift, Wealth Distribution, And Development," Macroeconomic Dynamics, Cambridge University Press, vol. 12(04), pages 527-559, September.
- Kazuhiro Yuki, 2005. "Sectoral Shift, Wealth Distribution, and Development," Development and Comp Systems 0509001, EconWPA.
- Arnaud Chevalier & Colm Harmon & Ian Walker & Yu Zhu, 2004.
"Does Education Raise Productivity, or Just Reflect it?,"
Royal Economic Society, vol. 114(499), pages F499-F517, November.
- Chevalier, Arnaud & Harmon, Colm & Walker, Ian & Zhu, Yu, 2003. "Does Education Raise Productivity or Just Reflect It?," CEPR Discussion Papers 3993, C.E.P.R. Discussion Papers.
- Arnaud Chevalier & Colm Harmon & Ian Walker & Yu Zhu, 2003. "Does education raise productivity, or just reflect it?," Working Papers 200304, School Of Economics, University College Dublin.
- Yuki, Kazuhiro, 2007. "Urbanization, informal sector, and development," Journal of Development Economics, Elsevier, vol. 84(1), pages 76-103, September.
- Galindo-Rueda, Fernando, 2003.
"Employer Learning and Schooling-Related Statistical Discrimination in Britain,"
IZA Discussion Papers
778, Institute for the Study of Labor (IZA).
- Fernando Galindo-Rueda, 2003. "Employer Learning and Schooling-Related Statistical Discrimination in Britain," CEE Discussion Papers 0031, Centre for the Economics of Education, LSE.
- Galindo-Rueda, Fernando, 2003. "Employer Learning and Schooling-Related Statistical Discrimination in Britain," Royal Economic Society Annual Conference 2003 82, Royal Economic Society.
- Hendel, Igal & Shapiro, Joel & Willen, Paul, 2005.
"Educational opportunity and income inequality,"
Journal of Public Economics,
Elsevier, vol. 89(5-6), pages 841-870, June.
- Igal Hendel & Joel Shapiro & Paul Willen, 2003. "Educational Opportunity and Income Inequality," Working Papers 89, Barcelona Graduate School of Economics.
- Igal Hendel & Joel Shapiro & Paul Willen, 2004. "Educational opportunity and income inequality," Public Policy Discussion Paper 04-5, Federal Reserve Bank of Boston.
- Paul Willen & Igal Hendel & Joel Shapiro, 2004. "Educational Opportunity and Income Inequality," NBER Working Papers 10879, National Bureau of Economic Research, Inc.
- Coate, Stephen & Loury, Glenn C, 1993.
"Will Affirmative-Action Policies Eliminate Negative Stereotypes?,"
American Economic Review,
American Economic Association, vol. 83(5), pages 1220-40, December.
- Coate, S. & Loury, G.C., 1992. "Will Affirmative Action Policies Eliminate Negative Stereotypes?," Papers 3, Boston University - Department of Economics.
- Joseph G. Altonji & Charles R. Pierret, 2001.
"Employer Learning And Statistical Discrimination,"
The Quarterly Journal of Economics,
MIT Press, vol. 116(1), pages 313-350, February.
- Joseph G. Altonji & Charles R. Pierret, 1997. "Employer learning and statistical discrimination," Working Paper Series, Macroeconomic Issues WP-97-11, Federal Reserve Bank of Chicago.
- Joseph G. Altonji & Charles R. Pierret, 1997. "Employer Learning and Statistical Discrimination," NBER Working Papers 6279, National Bureau of Economic Research, Inc.
- Joseph G. Altonji & Charles R. Pierret, . "Employer Learning and Statistical Discrimination," IPR working papers 97-18, Institute for Policy Resarch at Northwestern University.
- Kelly Bedard, .
"Human Capital Versus Signaling Models: University Access and High School Drop-outs,"
Canadian International Labour Network Working Papers
19, McMaster University.
- Kelly Bedard, 2001. "Human Capital versus Signaling Models: University Access and High School Dropouts," Journal of Political Economy, University of Chicago Press, vol. 109(4), pages 749-775, August.
- Kelly Bedard, . "Human Capital Versus Signaling Models: University Access and High School Drop-outs," Claremont Colleges Working Papers 1999-01, Claremont Colleges.
- Ulla Hämäläinen & Roope Uusitalo, 2008. "Signalling or Human Capital: Evidence from the Finnish Polytechnic School Reform," Scandinavian Journal of Economics, Wiley Blackwell, vol. 110(4), pages 755-775, December.
- Strobl, Eric, 2003. "Is Education Used as a Signaling Device for Productivity in Developing Countries? Evidence from Ghana," IZA Discussion Papers 683, Institute for the Study of Labor (IZA).
- Ljungqvist, Lars, 1993. "Economic underdevelopment : The case of a missing market for human capital," Journal of Development Economics, Elsevier, vol. 40(2), pages 219-239, April.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:16982. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht)
If references are entirely missing, you can add them using this form.