Education - A Job Market Signal?
Source: ELINKEINOELÄMÄN TUTKIMUSLAITOS
This paper reviews the theoretical and empirical literature on job market signaling and on education as a job market signal. Possible economic implications of educational job market signaling to an individual and the society are represented based on existing theories. The paper also reviews central methods in empirical testing of the signaling/screening hypothesis. The overall impression from the empirical section suggests that the signaling effect of education on wages is minor compared to the human capital effect.