Microeconomía Señalización

SIGNALLING
 

 

 
This
  paper
  tests
  the
  labor
  market
  signaling
  hypothesis
  for
  the
  General
  Educational
 
Development
 (GED)
 equivalency
 credential.
 Using
 a
 unique
 data
 set
 containing
 GED
 test
 scores
 
and
  Social
  Security
  Administration
  (SSA)
  earnings
 data,
  we
  exploit
  variation
  in
  GED
  status
 
generated
 by
 differential
 state
 GED
 passing
 standards
 to
 identify
 the
 signalingvalue
 of
 the
 GED,
 
net
  of
  human
  capital
  effects.
  Our
  results
  indicate
  that
  the
  GED
  signal
  increases
  the
  earnings
  of 
young
  white
  dropouts
  by
  10
  to
  19
  percent.
  We
  find
  no
  statistically
  significant
  effects
  for
 
minority
 dropouts.
 

 
The
  positive
  correlation
  between
  education
  and
  earnings
  is
  one
  of
  the
  consistent
  findings
  of
 
the
  human
  capital
 literature.
  In
  the
  early
  1970s,however,
  Arrow
  119731and
  Spence
 
119731formu
­
  lated
  an
  alternative,
  information
­based
  explanation
  for
  the
  educa
­
  tion
­
earnings
  relationship.
  Over
  the
  last
  25
  years
  many
  econo
­
  mists
  have
  conducted
  empirical 
work
  aimed
  at
  exploring
  the
  signaling
  hypothesis.
  It
  has
  proved
  difficult,
  however,
  to
  distin
­
 
guish
 between
 human
 capital
 and
 signaling
 explanations
 of
 the
 observed
 relationship
 between
 
education
 and
 earnings.
 

 
Ideal
 data
 for
 identifying the
 returns
 to
 a
 signal
 would
 contain
 exogenous
 variation
 in
 signaling
 
status
 among
 individu
­
  als
 with
 similar
 levels
 of
 human
 capital.
 In
 this
 paper
 we
 approximate
 
that
 ideal
 in
 estimating
 the
 returns
 to
 a
 particular
 labor
 market
 signal,
 the General
 Educational
 
Development
 (GED)
 credential,
 and
 in
 so
 doing
 we
 provide
 a
 test
 of
 the
 signaling
 hypothesis
 
for
 this
 credential.
 

 
The
  GED
  was
  introduced
  in
  1942
  to
  provide
  a
  way
  for
  veterans
  without
  a
  high
  school
  diploma 
to
 earn
 a
 secondary
 school
 credential.
 The
 GED
 program
 has
 evolved
 markedly
 so
 that
 today
 
the
  credential
  is
  the
  primary
  "second
  chance"route
  to
  high
  school
  certification
  for
  school
 
dropouts
  in
  the
  United
  States.
  Each
  year
  more
  than  one
  million
  young
  people
  drop
  out
  of
 
school,
 and
 eventually
 about
 one
­third
 of
 them
 will
 acquire
 a
 GED.
 

 
Using
 interstate
 variation
 in
 GED
 passing
 standards,
 we
 are
 able
 to
 compare
 individuals
 who
 all
 
chose
 to
 try
 to
 obtain
 a GED
 and
 who
 have
 the
 same
 GED
 test
 scores,
 but
 who
 differ
 in
 GED
 
status
  because
  of
  differences
  in
  the
  stringency
  of
  the
  passing
  standards
  in
  their
  state
  of
 
residence.
  We
  will
  argue
  that
  this
  "natural
  experiment"
  research...