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Education and Signaling: Evidence from a Highly Competitive Labor Market

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  • John Heywood
  • Xiangdong Wei

Abstract

This paper directly tests for differences in returns to education between the employed and self-employed in Hong Kong. Using a step-function, we find significantly smaller returns for the self-employed, suggesting that in the highly competitive labor market of Hong Kong education plays a signaling role. This pattern persists for both genders, when accounting for self-selection into employment status and when accounting for self-employed professionals who signal.

Suggested Citation

  • John Heywood & Xiangdong Wei, 2004. "Education and Signaling: Evidence from a Highly Competitive Labor Market," Education Economics, Taylor & Francis Journals, vol. 12(1), pages 1-16.
    • Handle: RePEc:taf:edecon:v:12:y:2004:i:1:p:1-16
    DOI: 10.1080/0964529042000193925
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    References listed on IDEAS

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    1. Enright, Michael J. & Scott, Edith E. & Dodwell, David, 1997. "The Hong Kong Advantage," OUP Catalogue, Oxford University Press, number 9780195903225.
    2. Clive R. Belfield, 2000. "Economic Principles for Education," Books, Edward Elgar Publishing, number 2159.
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    Cited by:

    1. Kristinn Hermannsson & Patrizio Lecca, 2016. "Human Capital in Economic Development: From Labour Productivity to Macroeconomic Impact," Economic Papers, The Economic Society of Australia, vol. 35(1), pages 24-36, March.
    2. Fossen, Frank M. & Büttner, Tobias J.M., 2013. "The returns to education for opportunity entrepreneurs, necessity entrepreneurs, and paid employees," Economics of Education Review, Elsevier, vol. 37(C), pages 66-84.
    3. Savanti, Maria Paula & Patrinos, Harry Anthony, 2005. "Rising returns to schooling in Argentina, 1992-2002 : productivity or credentialism?," Policy Research Working Paper Series 3714, The World Bank.
    4. Kristinn Hermannsson & Patrizio Lecca, 2014. "Human capital investment and population growth: An overlapping generations analysis for Malawi," EcoMod2014 6823, EcoMod.
    5. Carolina Castagnetti & Silvia Dal Bianco & Luisa Rosti, 2011. "Shortening university career fades the signal away. Evidence from Italy," Quaderni di Dipartimento 146, University of Pavia, Department of Economics and Quantitative Methods.
    6. repec:ebl:ecbull:v:9:y:2005:i:4:p:1-7 is not listed on IDEAS
    7. Hermannsson, Kristinn & Lecca, Patrizio, 2015. "Human Capital in Economics Development: From Labour Productivity to Macroeconomic Impact," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon TN 2015-53, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    8. Luisa Rosti & Chikara Yamaguchi & Carolina Castagnetti, 2005. "Educational Performance as Signalling Device: Evidence from Italy," Economics Bulletin, AccessEcon, vol. 9(4), pages 1-7.

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