Education as advertisement

Junichiro Ishida

Economics Bulletin, 2004, vol. 10, issue 8, 1-8

Abstract: The paper perceives education as a type of money burning activity, much like advertisement, and examines its effect on social welfare. In a model where the employer's job assignment also functions as a signal a la Waldman (1984), there exists a separating equilibrium in which education credibly conveys information even when the single-crossing property fails to hold. Moreover, we also show that education as advertisement can actually be welfare-improving. This result indicates that education can be meaningful and even socially desirable even if its sole role is simply to waste resources.

JEL-codes: D6 J0 (search for similar items in EconPapers)
Date: 2004-09-10
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Citations: View citations in EconPapers (4)

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