In order to use schooling as a signal,

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Schooling as a signal works effectively when it is costlier for low-skilled workers than for high-skilled workers, ensuring that only those who are likely to be more productive can afford the signal. It must not be prohibitively expensive, so high-skilled workers are still incentivized to obtain it. Firms need to verify the schooling easily to trust the signal, and there must be variation in educational attainment (i.e., some people choose not to complete schooling) for the signal to differentiate between workers.

In Order to Use Schooling as a Signal