Beyond Signaling and Human Capital: Education and the Revelation of Ability

Peter Arcidiacono, Patrick Bayer and Aurel Hizmo

American Economic Journal: Applied Economics, 2010, vol. 2, issue 4, 76-104

Abstract: We provide evidence that college graduation plays a direct role in revealing ability to the labor market. Using the NLSY79, our results suggest that ability is observed nearly perfectly for college graduates, but is revealed to the labor market more gradually for high school graduates. Consequently, from the beginning of their careers, college graduates are paid in accordance with their own ability, while the wages of high school graduates are initially unrelated to their own ability. This view of ability revelation in the labor market has considerable power in explaining racial differences in wages, education, and returns to ability. (JEL D82, I21, I23, J24, J31)

JEL-codes: D82 I21 I23 J24 J31 (search for similar items in EconPapers)
Date: 2010
Note: DOI: 10.1257/app.2.4.76
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Citations: View citations in EconPapers (156)

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Related works:
Working Paper: Beyond Signaling and Human Capital: Education and the Revelation of Ability (2010)
Working Paper: Beyond Signaling and Human Capital: Education and the Revelation of Ability (2008)
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