Job Market Signaling and Employer Learning

Carlos Alós-Ferrer and Julien Prat

No 3285, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper extends the job market signaling model of Spence (1973) by allowing firms to learn the ability of their employees over time. Contrary to the model without employer learning, we find that the Intuitive Criterion does not always select a unique separating equilibrium. When the Intuitive Criterion bites and information is purely asymmetric, the separating level of education does not depend on the observability of workers’ types. On the other hand, when workers are also uncertain about their productivity, the separating level of education is ambiguously related to the speed of employer learning.

Keywords: education; job markets; signaling; intuitive criterion; employer learning (search for similar items in EconPapers)
JEL-codes: C70 D82 D83 I20 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2008-01
New Economics Papers: this item is included in nep-edu, nep-hrm and nep-lab
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Citations: View citations in EconPapers (7)

Published - published online in: Journal of Economic Theory, 2012, [In Press / Corrected Proof]

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Related works:
Journal Article: Job market signaling and employer learning (2012)
Working Paper: Job Market Signaling and Employer Learning (2007)
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