Job market signals and signs

Arbeitspapier

What happens to job market signaling under two-dimensional asymmetric information? With 2 types of productivity and noise, the equilibrium remains separating if an extended single-crossing condition is satisfied. If not, there are partially pooling equilibria where only extreme types can be distinguished, and supplementary information is needed. On-the-job interaction gives employers private information on productivity, which employment relationships may reveal to the market. While sticky wages lead to public revelation of this private information through dismissals, flexible wages do not, allowing employers to do cream skimming. Beyond the 2x2 case, employment relationships are always a noisy sign, so education is valuable as a life-time job market signal for high-ability workers.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Serie Documentos de Trabajo ; No. 326

Classification and Topics

• Classification: Wirtschaft ; Wage Level and Structure; Wage Differentials ; Household Behavior: General
• Subject: two-dimensional asymmetric information ; private information ; informational rents ; single-crossing ; signals ; signs ; Signalling ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Streb, Jorge M.
• Event: Veröffentlichung
• (who): Universidad del Centro de Estudios Macroeconómicos de Argentina (UCEMA)
• (where): Buenos Aires
• (when): 2006

Further information

• Handle: http://hdl.handle.net/10419/84354
• Last update: 10.03.2025, 11:42 AM CET