Yuki, Kazuhiro (2009): Education, Signaling, and Wage Inequality in a Dynamic Economy.
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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.
|Item Type:||MPRA Paper|
|Original Title:||Education, Signaling, and Wage Inequality in a Dynamic Economy|
|Keywords:||Human capital; Education; Signaling; Statistical discrimination; Credit constraint|
|Subjects:||O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O11 - Macroeconomic Analyses of Economic Development
I - Health, Education, and Welfare > I2 - Education and Research Insititutions > I20 - General
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O15 - Human Resources; Human Development; Income Distribution; Migration
J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J24 - Human Capital; Skills; Occupational Choice; Labor Productivity
|Depositing User:||Kazuhiro Yuki|
|Date Deposited:||28. Aug 2009 01:01|
|Last Modified:||18. Feb 2013 19:52|
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