Business Economics and Public Policy Papers

Document Type

Journal Article

Date of this Version

2007

Publication Source

The RAND Journal of Economics

Volume

38

Issue

4

Start Page

1020

Last Page

1043

DOI

10.1111/j.0741-6261.2007.00124.x

Abstract

We develop a job-market signalling model where signals convey two pieces of information. This model is employed to study countersignalling (signals nonmonotonic in ability) and the GED exam. A result of the model is that countersignalling is more likely to occur in jobs that require a combination of skills that differs from the combination used in the schooling process. The model also produces testable implications consistent with evidence on the GED: (i) it signals both high cognitive and low noncognitive skills and (ii) it does not affect wages.

Copyright/Permission Statement

This is the peer reviewed version of the following article: Araujo, Aloisio, Daniel Gottlieb, and Humberto Moreira. “A Model of Mixed Signals with Applications to Countersignaling,” RAND Journal of Economics, winter 2007, pp. 1020-1043 , which has been published in final form at http://dx.doi.org/10.1111/j.0741-6261.2007.00124.x. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving http://olabout.wiley.com/WileyCDA/Section/id-820227.html#terms.

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Date Posted: 27 November 2017

This document has been peer reviewed.