Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 29: A Procedure for Testing the Signalling Hypothesis

James W. Albrecht
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James W. Albrecht: Columbia University

Abstract: This paper develops a procedure for testing the signaling hypothesis as advanced by Spence, et. al. The approach used is to examine directly the question of whether employers use education for purely informational purposes in their hiring decisions. An application of the method to a recruitment by the Swedish auto manufacturer Volvo is presented.

Keywords: Employers; Education; Recruitment; Manufacturing

JEL-codes: E24; I20; L60

19 pages, July 1980

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