IDEAS home Printed from https://ideas.repec.org/a/cup/macdyn/v23y2019i03p1247-1286_00.html
   My bibliography  Save this article

The Role Of Education Signaling In Explaining The Growth Of The College Wage Premium

Author

Listed:
  • Zheng, Yu

Abstract

This paper incorporates an education signaling mechanism into a dynamic model of production and asks if “higher education as a signal” helps explain the simultaneous increase in the supply and price of skilled relative to unskilled labor in the United States since 1980. The key mechanism is that if college degrees serve as a signal of unobservable talent and talent is productive at the workplace, then improved access to college will enable a higher fraction of the population to signal talent by completing college, resulting in degrees being a better signal about talent and a widening skill premium. When I assess the contribution of signaling in the model calibrated to the US economy from 1980 to 2003, I find that about 10% of the increase in the skill premium can be attributed to the signaling mechanism, after adjusting for the potential decline in the quality of college graduates.

Suggested Citation

  • Zheng, Yu, 2019. "The Role Of Education Signaling In Explaining The Growth Of The College Wage Premium," Macroeconomic Dynamics, Cambridge University Press, vol. 23(3), pages 1247-1286, April.
    • Handle: RePEc:cup:macdyn:v:23:y:2019:i:03:p:1247-1286_00
    as

    Download full text from publisher

    File URL: https://www.cambridge.org/core/product/identifier/S1365100517000232/type/journal_article
    File Function: link to article abstract page
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Marina Töpfer, 2019. "Honours as a signal - evidence from a quasi-natural experiment in Italy Abstract: This note compares the wage premium of honours degrees in two different Italian university systems (old and new) in 20," Economics Bulletin, AccessEcon, vol. 39(1), pages 1-7.
    2. Birulin, Oleksii & Parfinenko, Nina & Smirnov, Vladimir & Wait, Andrew, 2019. "Signaling and the College Wage Premium," Working Papers 2019-14, University of Sydney, School of Economics, revised Nov 2019.
    3. Birulin, Oleksii & Smirnov, Vladimir & Wait, Andrew, 2020. "The evolving nature of the college wage premium," Economic Modelling, Elsevier, vol. 93(C), pages 474-479.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cup:macdyn:v:23:y:2019:i:03:p:1247-1286_00. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kirk Stebbing (email available below). General contact details of provider: https://www.cambridge.org/mdy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.