Education, Dynamic Signaling and Social Distance

Gallice, Andrea (January 2007): Education, Dynamic Signaling and Social Distance. Discussion Papers in Economics 2007-5

Abstract

The paper enriches a standard signaling model of education with issues of social distance defined over educational achievements. More specifically it considers the effects that the presence of conformist and status seeking individuals has on educational dynamics. Under very reasonable assumptions about the composition of the society, the model endogenously displays a growing average level of schooling. As education rises, signals get noisy and potentially harmful for what concerns firms' profitability. Firms, in order to adjust their screening process, react with an increase of their educational requirements. All these dynamics are in line with recent trends and other stylized facts about education.

• Item Type: Paper
• Keywords: education, signaling, status seeking, conformist behaviour.
• Faculties: Economics; Economics > Munich Discussion Papers in Economics; Economics > Munich Discussion Papers in Economics > Micro-Economics; Economics > Munich Discussion Papers in Economics > Behavioral Economics
• Subjects: 300 Social sciences > 300 Social sciences, sociology and anthropology; 300 Social sciences > 330 Economics
• JEL Classification: I20, D70, D82
• Language: English