Educational Signaling in Two Different Education Systems

Ropero García Miguel Ángel
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Ropero García Miguel Ángel: Faculty of Economics, Department of Applied Economics, University of Malaga, Malaga, Spain

The B.E. Journal of Theoretical Economics, 2025, vol. 25, issue 2, 343-373

Abstract: We consider a two-period signaling model in which an informed worker has to decide whether she invests in education or participates in the labor market in the first period. When the rate at which the cost of education decreases with the worker’s productivity is sufficiently high (low), the worker’s incentives to invest in education become stronger (weaker) when the worker is more patient, when future prospects in the labor market are better, or when the cost of education decreases. Those results are robust to the worker’s risk preferences and to the specification of the prior distribution function of worker’s productivities.

Keywords: education; risk preferences; demanding educational system; separating equilibrium; signaling (search for similar items in EconPapers)
JEL-codes: C72 C79 D82 D83 I21 J01 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1515/bejte-2024-0076

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