Job Market Signaling and Screening: An Experimental Comparison

Dorothea Kübler, Wieland Müller and Hans-Theo Normann ()

No 1794, IZA Discussion Papers from Institute for the Study of Labor (IZA)

Abstract: We analyze the Spence education game in experimental markets. We compare a signaling and a screening variant, and we analyze the effect of increasing the number of competing employers from two to three. In all treatments, more efficient workers invest more often in education and employers offer higher wages for workers who have invested. However, separation is incomplete, e.g., investment does not pay on average for efficient worker types. Increased competition leads to higher wages in the signaling sessions, not with screening. In the signaling version, we observe significantly more separating outcomes than in the screening version of the game.

Keywords: job-market signaling; job-market screening; sorting; Bayesian games; experiments (search for similar items in EconPapers)
JEL-codes: C35 I2 J24 P3 P52 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-edu and nep-exp
Date: 2005-10
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Related works:
Working Paper: Job market signaling and screening: an experimental comparison (2003)
Working Paper: Job market signaling and screening: An experimental comparison (2004)
Journal Article: Job-market signaling and screening: An experimental comparison (2008)
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