A Signaling Theory of Education under the Presence of Career Concerns
A person’s life consists of two important stages: the first stage as a student and the second stage as a worker. In an integrated model of education and career concerns, I analyze the welfare effects of education. In Spence’s job market signaling model, education as a sorting device improves efficie...
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| Format: | Article |
| Language: | English |
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Korea Development Institute
2016-05-01
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| Series: | KDI Journal of Economic Policy |
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| Online Access: | https://doi.org/10.23895/kdijep.2016.38.2.87 |
| Summary: | A person’s life consists of two important stages: the first stage as a student and the second stage as a worker. In an integrated model of education and career concerns, I analyze the welfare effects of education. In Spence’s job market signaling model, education as a sorting device improves efficiency by mitigating the lemon market problem. In contrast, in the integrated model, education as a sorting device can be detrimental to social welfare, as it eliminates work incentives generated by career concerns. |
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| ISSN: | 2586-2995 2586-4130 |