MULTIDIMENSIONAL SIGNALING IN THE LABOR MARKET

Jeong-Yoo Kim

Manchester School, 2007, vol. 75, issue s1, 64-87

Abstract: I consider a two‐dimensional job market signaling model in which firms care about a worker's personal network as well as his technical productivity, and a worker can choose both academic activity and social activity to signal his ability. In a simple model where the social activity forming a social network does not require special ability, I show that the Cho–Kreps intuitive criterion singles out Spence's outcome of signaling high academic ability by high education. I also demonstrate the possibility that a worker with high academic ability may underinvest in education when the social ability is correlated with the academic ability.

Date: 2007
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https://doi.org/10.1111/j.1467-9957.2007.01038.x

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