Employer Learning and the Signaling Value of Education

Altonji, Joseph G.; Pierret, Charles R.

doi:10.3386/w5438

Cited by 36 publications

(46 citation statements)

References 19 publications

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“…However, the magnitudes of the earnings differences associated with skill differences are, on average, about half as large among 17-22 year-old dropouts as they are among the same groups when they are four years older. That the returns to cognitive skills increase with age is a pattern also found in other studies (Altonji and Pierret 1996;Farber and Gibbons 1996).…”

supporting

confidence: 65%

Do the Cognitive Skills of School Dropouts Matter in the Labor Market?

Tyler¹,

Murnane²,

Willett³

2000

The Journal of Human Resources

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supporting

confidence: 65%

Do the Cognitive Skills of School Dropouts Matter in the Labor Market?

Tyler¹,

Murnane²,

Willett³

2000

The Journal of Human Resources

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“…At younger ages, the effects of personality traits are small and insignificant. Hause (1972) also found with the NBER-Thorndike data that ability played an increasing role with increasing age, as do Farber and Gibbons (1996) and Altonji and Pierret (1996).…”

Section: The Direct Effects By Age For Menmentioning

confidence: 70%

Personality, IQ, and lifetime earnings

Gensowski

2018

Labour Economics

117

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu Talented individuals are seen as drivers of long-term growth, but how do they realize their full potential? In this paper, I show that even in a group of high-IQ men and women, lifetime earnings are substantially influenced by their education and personality traits. I identify a previously undocumented interaction between education and traits in earnings generation, which results in important heterogeneity of the net present value of education. Personality traits directly affect men's earnings, with effects only developing fully after age 30. These effects play a much larger role for the earnings of more educated men. Personality and IQ also influence earnings indirectly through educational choice. Surprisingly, education and personality skills do not always raise the family earnings of women in this cohort, as women with very high education and IQ are less likely to marry, and thus have less income through their husbands. To identify personality traits, I use a factor model that also serves to correct for prediction error bias, which is often ignored in the literature. This paper complements the literature on investments in education and personality traits by showing that they also have potentially high returns at the high end of the ability distribution. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SJEL Classification: J24, I24, J16

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“…'See Altonji and Pierret (1996) for a model that predicts declining returns to educational signals but retains more of the assumptions of Farber and Gibbons (1996). can yield subsamples that are a small proportion of the original sample.…”

Section: Data and Resultsmentioning

confidence: 99%

Sheepskin Effects by Cohort: Implications of Job Matching in a Signaling Model

Belman

Heywood

1997

Oxford Economic Papers

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In the presence of job matching, the returns to education signals are shown to decline in value as additional work experience allows more direct observation of productivity. This is tested by estimating sheepskin effects across five age cohorts of non-minority males in 1991. The effects are large and significant in early cohorts and virtually nonexistent in later cohorts. This pattern is partially codrmed with estimations within cohorts showing sheepskin returns declining from 1979 to 1991. The pattern within cohorts suggests that the 1991 pattern is not merely the result of vintage effects but caution is expressed in drawing conclusions.

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Employer Learning and the Signaling Value of Education

Cited by 36 publications

References 19 publications

Do the Cognitive Skills of School Dropouts Matter in the Labor Market?

Do the Cognitive Skills of School Dropouts Matter in the Labor Market?

Personality, IQ, and lifetime earnings

Sheepskin Effects by Cohort: Implications of Job Matching in a Signaling Model

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