EconPapers    
Economics at your fingertips  
 

The choice of majors as a signaling device

Javier Nunez and Andres Otero ()
Additional contact information
Andres Otero: Universidad de Chile

Revista de Analisis Economico – Economic Analysis Review, 2005, vol. 20, issue 1, 23-43

Abstract: This work analyzes the ability signaling hypothesis using a rich set of data of a homogeneous population -Business and Economics graduates of University X- who share similar occupations in the labor market. After studying three years of a common core curriculum, students must choose between either a Business or an Economics major. The work investigates if the choice of major is employed by the labor market as a signal of ability and of expected productivity, and if this is reflected in differences in the earnings profiles of graduates of each field. Given the detailed nature of the data, we employ an unusually rich measure of ability, namely the grades obtained in the core curriculum. This work presents multiple evidence in favor of this hypothesis. The evidence is based on seven empirical results, properly derived from a simple theoretical signaling model. The empirical facts support the signaling hypothesis under the assumption that an individual's ability is gradually revealed to the labor market as experience increases.

Keywords: Signaling; Choice of Majors; Human Capital (search for similar items in EconPapers)
JEL-codes: C70 D82 I21 J24 (search for similar items in EconPapers)
Date: 2005
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link)
http://www.rae-ear.org/index.php/rae/article/view/44 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ila:anaeco:v:20:y:2005:i:1:p:23-43

Ordering information: This journal article can be ordered from

Access Statistics for this article

Revista de Analisis Economico – Economic Analysis Review is currently edited by Carlos Ponce

More articles in Revista de Analisis Economico – Economic Analysis Review from Universidad Alberto Hurtado/School of Economics and Business Contact information at EDIRC.
Bibliographic data for series maintained by Mauricio Tejada ().

 
Page updated 2022-07-29
Handle: RePEc:ila:anaeco:v:20:y:2005:i:1:p:23-43