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Education, Dynamic Signaling and Social Distance

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  • Gallice, Andrea

Abstract

The paper enriches a standard signaling model of education with issues of social distance defined over educational achievements. More specifically it considers the effects that the presence of conformist and status seeking individuals has on educational dynamics. Under very reasonable assumptions about the composition of the society, the model endogenously displays a growing average level of schooling. As education rises, signals get noisy and potentially harmful for what concerns firms' profitability. Firms, in order to adjust their screening process, react with an increase of their educational requirements. All these dynamics are in line with recent trends and other stylized facts about education.

Suggested Citation

  • Gallice, Andrea, 2007. "Education, Dynamic Signaling and Social Distance," Discussion Papers in Economics 1364, University of Munich, Department of Economics.
    • Handle: RePEc:lmu:muenec:1364
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Gallice, Andrea, 2018. "Social status, preferences for redistribution and optimal taxation: A survey," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 12, pages 1-17.
    2. Chia-Hui Chen, 2012. "Type composition, career concerns, and signaling efforts," Theory and Decision, Springer, vol. 73(3), pages 401-422, September.
    3. Andrea Gallice & Edoardo Grillo, 2019. "A Model of Educational Investment, Social Concerns, and Inequality," Scandinavian Journal of Economics, Wiley Blackwell, vol. 121(4), pages 1620-1646, October.
    4. Kristinn Hermannsson, 2015. "Expenditure and Displacement effects of Students in the Periphery: Impact on the Scottish Highlands and Islands," ERSA conference papers ersa15p1601, European Regional Science Association.
    5. Dadon-Golan, Zehorit & BenDavid-Hadar, Iris & Klein, Joseph, 2019. "Revisiting educational (in)equity: Measuring educational Gini coefficients for Israeli high schools during the years 2001–2011," International Journal of Educational Development, Elsevier, vol. 70(C), pages 1-1.
    6. Andrea Gallice & Edoardo Grillo, 2015. "A Model of Educational Investment and Social Status," Carlo Alberto Notebooks 405, Collegio Carlo Alberto.

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    More about this item

    Keywords

    education; signaling; status seeking; conformist behaviour.;
    All these keywords.

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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