In the signaling theory of education,
A)discrimination does not affect wage differentials.
B)schooling makes workers more productive in the long-run.
C)schooling makes workers more productive in the short-run.
D)the worker signals to the employer that he is a valuable employee because he was willing to spend time to get an education.

Question

Quizplus · Accepted Answer

According to the signaling theory of education, the worker signals to the employer that he is a valuable employee because he was willing to spend time to get an education. This means that the employer will believe that the worker has certain positive traits such as dedication, intelligence, and perseverance, which may not be observable directly in the job market. Therefore, the worker with more education will be able to command a higher wage than the worker with less education, even if their productivity levels are the same. Discrimination can affect the signaling value of education, but it does not invalidate the basic premise of the signaling theory.

In the Signaling Theory of Education