Beyond Signaling and Human Capital: Education and the Revelation of Abilit
Authors: Arcidiacono, Peter; Bayer, Patrick; Hizmo, Aurel
Source: American Economic Journal: Applied Economics, Volume 2, Number 4, October 2010 , pp. 76-104(29)
Publisher: American Economic Association
Abstract:We provide evidence that college graduation plays a direct role in revealing ability to the labor market. Using the NLSY79, our results suggest that ability is observed nearly perfectly for college graduates, but is revealed to the labor market more gradually for high school graduates. Consequently, from the beginning of their careers, college graduates are paid in accordance with their own ability, while the wages of high school graduates are initially unrelated to their own ability. This view of ability revelation in the labor market has considerable power in explaining racial differences in wages, education, and returns to ability.
Document Type: Research Article
Publication date: October 2010
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