When employers sort employment applications into high-ability and low-ability people based on whether or not the applicant has a college degree (irrespective of major), they are providing evidence in support of the
A)human-capital theory of education.
B)signaling theory of education.
C)principle that education reduces marginal productivity.
D)principle that most business owners are more interested in discriminating against a particular group than in maximizing profits.

Question

Quizplus · Accepted Answer

The signaling theory of education suggests that education serves as a signal to employers about an individual's abilities or productivity level. When employers sort applications based on the presence of a college degree, they are using the degree as a signal of high ability, which aligns with the signaling theory.

When Employers Sort Employment Applications into High-Ability and Low-Ability People