Beyond signaling and human capital: Education and the revelation of ability
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2010-10-01
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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.
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Arcidiacono, Peter, Patrick Bayer and Aurel Hizmo (2010). Beyond signaling and human capital: Education and the revelation of ability. American Economic Journal: Applied Economics, 2(4). pp. 76–104. 10.1257/app.2.4.76 Retrieved from https://hdl.handle.net/10161/4417.
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Scholars@Duke
Patrick Bayer
Bayer's research focuses on wide range of subjects including racial inequality and segregation, social interactions, housing markets, education, and criminal justice. His most recent work has been published in the Quarterly Journal of Economics, American Economic Review, Econometrica, and the Review of Financial Studies. He is currently working on projects that examine jury representation and its consequences, the intergenerational consequences of residential and school segregation, neighborhood tipping, gentrification, the effect of police and criminal justice interactions on families, and the impact of bail reform.
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