Economics - Theses

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Education: tests of whether it enhances productivity or merely conveys information on individual productivity in the labour market

Ryan, Christopher Anthony ( 2001-04)

Human capital and screening theories of the role of education in the labour market have similar predictions about individual behaviour and labour market outcomes. This makes it difficult to test between the theories. Nevertheless, the task of doing so is important since the social return to education is likely to be small unless education adds to productivity as human capital theory, but not screening theory, assumes. Education may only convey information about likely individual productivity under screening. It serves this function because individual productivity is difficult for employers to observe. In fact, there is very little evidence from existing tests of the theories that education does not add to productivity. However, few of the tests that have been undertaken between the theories are convincing. The three empirical chapters of this thesis contain tests of some aspects of the theories.