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The speed of employer learning and job market signalling revisited

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  • Steffen Habermalz

Abstract

This article discusses the claim made by Altonji and Pierret (AP) (1997) and Lange (2007) that a high Speed of Employer Learning (SEL) indicates a low value of Job Market Signalling (JMS). It is first discussed intuitively in the light of Spence's original model and then evaluated in a simple extension of a model developed by AP (1997). The analysis provided indicates that, if Employer Learning (EL) is incomplete, a high SEL is not necessarily indicative of a low value of JMS.

Suggested Citation

  • Steffen Habermalz, 2011. "The speed of employer learning and job market signalling revisited," Applied Economics Letters, Taylor & Francis Journals, vol. 18(7), pages 607-610.
    • Handle: RePEc:taf:apeclt:v:18:y:2011:i:7:p:607-610
    DOI: 10.1080/13504851.2010.482514
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    1. Joseph G. Altonji & Charles R. Pierret, 2001. "Employer Learning and Statistical Discrimination," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(1), pages 313-350.
    2. Henry S. Farber & Robert Gibbons, 1996. "Learning and Wage Dynamics," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(4), pages 1007-1047.
    3. Stiglitz, Joseph E, 1975. "The Theory of "Screening," Education, and the Distribution of Income," American Economic Review, American Economic Association, vol. 65(3), pages 283-300, June.
    4. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(3), pages 488-500.
    5. Fabian Lange, 2007. "The Speed of Employer Learning," Journal of Labor Economics, University of Chicago Press, vol. 25(1), pages 1-35.
    6. Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 87(3), pages 355-374.
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    Cited by:

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    2. Alós-Ferrer, Carlos & Prat, Julien, 2012. "Job market signaling and employer learning," Journal of Economic Theory, Elsevier, vol. 147(5), pages 1787-1817.
    3. Nick Huntington-Klein, 2021. "Human capital versus signaling is empirically unresolvable," Empirical Economics, Springer, vol. 60(5), pages 2499-2531, May.
    4. Theodore Koutmeridis, 2013. "The Market for "Rough Diamonds": Information, Finance and Wage Inequality," CDMA Working Paper Series 201307, Centre for Dynamic Macroeconomic Analysis, revised 14 Oct 2013.
    5. Timothy Perri, 2019. "Signaling and optimal sorting," Journal of Economics, Springer, vol. 126(2), pages 135-151, March.
    6. Steven Jacob Bosworth, 2019. "Higher education fees as signals," Economics Discussion Papers em-dp2019-16, Department of Economics, University of Reading.

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    More about this item

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts

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