Education and Job market signalling: How robust is the nexus?
In this paper the Signalling approach to the explanation of wage differentials is analysed in a critical way. Departing from the classic Spence's model, the article shows how the introduction of inequalities in accessing to education leads to separating equilibria characterised by redistributive effects among workers and firms, with lower wages for high skill workers respect to the traditional model. Moreover pooling equilibria can also exist as effect of such inequalities; in this case a unique wage exists for all types of workers, operating as a redistributive effect from high-skill to low-skill workers.
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4142, National Bureau of Economic Research, Inc.
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736, Princeton University, Department of Economics, Industrial Relations Section..
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565, California Institute of Technology, Division of the Humanities and Social Sciences.
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- Andrew Weiss, 1995. "Human Capital vs. Signalling Explanations of Wages," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 133-154, Fall.
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