College students who increase their human capital by acquiring the skills required for certain occupations typically earn higher incomes than high school graduates. This is called

Question

Quizplus · Accepted Answer

The learning effect of a college education refers to the increase in human capital that individuals acquire through educational attainment, which raises their productivity and earning potential. This increase in skills and knowledge is a factor that positively affects their income, hence Option A is the correct answer. The signaling effect (Option B) implies that employers use a college degree as a signal of certain attributes, such as work ethic or intelligence, while the discriminatory effect (Option C) suggests that college education leads to discrimination against those who do not have a degree. However, these do not reflect the increase in human capital, which is the essential factor in determining higher earnings.

College Students Who Increase Their Human Capital by Acquiring the Skills