ECON 313 Lecture Notes - Lecture 5: Signalling Theory, Human Capital, Statistical Significance
30 Nov 2017
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Document Summary
Seems obvious that there are private returns to education. Although it depends on the quality of education. Schooling is a signal, not a way to acquire valuable skills. Problem of information asymmetry between employer and job candidate. At time t=1, the employer hires or not based on the same cv, statistical. Interview employer looks at the hints of productivity (cv, bachelor) discrimination (not taste-based discrimination) For a candidate, certain characteristics cannot be changed. Increase in education for all is associated with: Lots of micro studies (krueger et al, 2001) Estimate (for a bunch of individuals i) All studies find a b between 0. 05 and 0. 15, so. 1 more year of education brings between 5% and 15% more salary. Empirically, returns to schooling seems to be working. Would it be better to address some of the problems by comparing the same age, gender and same family income. Use twins to control for unobserved family characteristics)
