The signaling theory of education suggests that when people earn a college degree they do not become more productive, but they do signal their high ability to prospective employers.

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The signaling theory of education, proposed by Michael Spence, suggests that obtaining a college degree serves as a signal to employers about an individual's inherent abilities, such as intelligence and perseverance, rather than necessarily increasing the individual's productivity through the skills learned.

The Signaling Theory of Education Suggests That When People Earn