Self-Awareness, Spencian Education and Performance Wages

Hans Hvide

Working Papers from Norwegian School of Economics and Business Administration-

Abstract: If worker performance is observable and contractible without cost, then why do we observe "Spencian", unproductive, education? We provide the following explanation. Say that the economy consists of several different sectors, and that agents are uncertain which of these sectors they are best fit for. Furthermore we assume that education improves an agent's estimate of his abilities. In that case education may be of social gain since it may improve the allocational efficiency of the economy.

Keywords: EDUCATION; LABOUR; WAGES (search for similar items in EconPapers)
JEL-codes: D11 D81 D83 (search for similar items in EconPapers)
Pages: 28 pages
Date: 1997
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Persistent link: https://EconPapers.repec.org/RePEc:fth:norgee:10/97

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