November 9

"Signaling and Self-Insight in the Job Market"

Hans Krogh Hvide

Abstract    This paper studies an environment where certain actions can serve both as a signal and as information acquisition. The specific context is the job market; education can serve both as a signal and to provide information about abilities. Given this double function of education, who undertakes education, and what are the welfare properties of education? In contrast to established theories, we predict that the mediocre educate and that the equilibrium amount of education is efficient.