The Screening Hypothesis and the Returns to Education (1974)

George Psacharopoulos

Chapter 9 in Tackling Inequality, 1999, pp 155-171 from Palgrave Macmillan

Abstract: Abstract The productive role of education has been questioned before, but is now under unusually heavy attack from the ‘screening hypothesis.’ If true, this hypothesis has quite devastating implications for educational policy and research. Broadly, it says that the earnings differentials associated with education do not mainly reflect improvements in individual productive capacity caused by education but, rather, employers’ use of education to identify preexisting differences in talents. If education has any social value, it is as a signaling device which helps to place the right man in the right job. But even in this case, too much education is likely to be sought, with the private returns to education exceeding the social returns.

Keywords: American Economic Review; Marginal Product; Private Return; Free Entry; Private Rate (search for similar items in EconPapers)
Date: 1999
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-37528-4_9

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DOI: 10.1057/9780230375284_9

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