The Speed of Employer Learning and Job Market Signaling Revisited

Abstract:     
This paper discusses the claim made in Altonji and Pierret (1997) and Lange (2005) that a high speed of employer learning indicates a low value of job market signaling. The claim is first discussed intuitively in light of Spence's original model and then evaluated in a simple extension of a model developed in Altonji and Pierret (1997). The analysis provided indicates that, if employer learning is incomplete, a high speed of employer learning is not necessarily indicative of a low value of job market signaling.

Number of Pages in PDF File: 17

Keywords: employer learning, signaling

JEL Classification: I20, D8, J41

working papers series