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The Signaling Value of a High School Diploma

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  • Damon Clark
  • Paco Martorell

Abstract

This paper distinguishes between the human capital and signaling theories by estimating the earnings return to a high school diploma. Unlike most indicators of education (e.g., a year of school), a diploma is essentially a piece of paper and, hence, by itself cannot affect productivity. Any earnings return to holding a diploma must therefore reflect the diploma's signaling value. Using regression discontinuity methods to compare the earnings of workers who barely passed and barely failed high school exit exams--standardized tests that students must pass to earn a high school diploma--we find little evidence of diploma signaling effects.

Suggested Citation

  • Damon Clark & Paco Martorell, 2014. "The Signaling Value of a High School Diploma," Journal of Political Economy, University of Chicago Press, vol. 122(2), pages 282-318.
    • Handle: RePEc:ucp:jpolec:doi:10.1086/675238
    DOI: 10.1086/675238
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