{"id":36802,"date":"2016-12-31T04:00:06","date_gmt":"2016-12-31T09:00:06","guid":{"rendered":"http:\/\/quotulatiousness.ca\/blog\/?p=36802"},"modified":"2017-07-14T10:08:32","modified_gmt":"2017-07-14T14:08:32","slug":"signaling","status":"publish","type":"post","link":"https:\/\/quotulatiousness.ca\/blog\/2016\/12\/31\/signaling\/","title":{"rendered":"Signaling"},"content":{"rendered":"<p align=\"center\"><iframe loading=\"lazy\" width=\"853\" height=\"480\" src=\"https:\/\/www.youtube.com\/embed\/F8ZHZRMSxKg\" frameborder=\"0\" allowfullscreen><\/iframe><\/p>\n<blockquote><p><strong>Published on 23 Sep 2015<\/strong><\/p>\n<p>A signal is an action that reveals information. Let\u2019s look at higher education, for example. A large fraction of the value you receive from your degree comes on the day you earn your diploma. Your expected wages don\u2019t increase with each class you complete along the way; instead, they spike sharply at the end when you receive your diploma. This is often referred to as the \u201cSheepskin Effect\u201d because diplomas used to be printed on sheepskin.<\/p>\n<p>Nobel Prize winner Michael Spence did research on this subject and found that education is valuable not necessarily because it creates valuable skills, but rather that it signals valuable skills. So how does the signal, represented by a degree, alleviate asymmetric information?<\/p>\n<p>Employers don\u2019t necessarily know how smart or skilled you are. Your degree, however, provides a credible signal of these traits and gives them more information they can use in the hiring process.<\/p>\n<p>What other signals exist? We discuss examples like diamond engagement rings, why criminals tattoo their face, and why a peacock has a colorful tail. Let us know what examples you come up with in the comments.<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>Published on 23 Sep 2015 A signal is an action that reveals information. Let\u2019s look at higher education, for example. A large fraction of the value you receive from your degree comes on the day you earn your diploma. Your expected wages don\u2019t increase with each class you complete along the way; instead, they spike [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":35193,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[25],"tags":[111,1026,1143,764],"class_list":["post-36802","post","type-post","status-publish","format-standard","hentry","category-economics","tag-cars","tag-microeconomics","tag-principlesofeconomics","tag-university"],"jetpack_featured_media_url":"https:\/\/quotulatiousness.ca\/blog\/wp-content\/uploads\/2016\/06\/favicon.png","jetpack_shortlink":"https:\/\/wp.me\/p2hpV6-9zA","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/36802","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/comments?post=36802"}],"version-history":[{"count":1,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/36802\/revisions"}],"predecessor-version":[{"id":36803,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/36802\/revisions\/36803"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/media\/35193"}],"wp:attachment":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/media?parent=36802"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/categories?post=36802"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/tags?post=36802"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}