Education and Job market signalling: How robust is the nexus?

Massimo Giannini

No 35, Working Papers in Public Economics from Department of Economics and Law, Sapienza University of Roma

Abstract: In this paper the Signalling approach to the explanation of wage differentials is analysed in a critical way. Departing from the classic Spence's model, the article shows how the introduction of inequalities in accessing to education leads to separating equilibria characterised by redistributive effects among workers and firms, with lower wages for high skill workers respect to the traditional model. Moreover pooling equilibria can also exist as effect of such inequalities; in this case a unique wage exists for all types of workers, operating as a redistributive effect from high-skill to low-skill workers.

Keywords: Signalling; Human Capital; Inequality. (search for similar items in EconPapers)
JEL-codes: C72 D30 D82 J31 (search for similar items in EconPapers)
Pages: 26
Date: 1999-01
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