Jake and Harry each have 130 hours of college credit from Impressive University. Each has 30 hours of economics. Jake has a bachelor's degree, while Harry is 3 credits short of required physical education classes and therefore does not have a degree. Each of them has one year of experience as a market analyst for ABC Company. Assuming that the physical education class would not enhance Harry's job performance, if Jake earns a higher salary than Harry, the ABC Company may subscribe to the
A)human capital theory.
B)discrimination theory.
C)compensating differential theory.
D)signaling theory.

Question

Quizplus · Accepted Answer

Signaling theory suggests that educational credentials serve as a signal to employers about a candidate's ability or productivity. Jake's bachelor's degree may signal to ABC Company that he is more qualified or capable, even if the additional physical education credits do not enhance job performance.

Jake and Harry Each Have 130 Hours of College Credit