KDI Journal of Economic Policy

Korea Development Institute (한국개발연구원)
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A Signaling Theory of Education under the Presence of Career Concerns

  • Received : 2015.07.09
  • Published : 2016.05.31
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Abstract

A person's life consists of two important stages: the first stage as a student and the second stage as a worker. In an integrated model of education and career concerns, I analyze the welfare effects of education. In Spence's job market signaling model, education as a sorting device improves efficiency by mitigating the lemon market problem. In contrast, in the integrated model, education as a sorting device can be detrimental to social welfare, as it eliminates work incentives generated by career concerns.

Keywords

References

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