Consider the following statements about the signaling hypothesis of education:
A. The signaling hypothesis of education is based on the idea that college graduates are more productive than non -college graduates.
B. The signaling hypothesis of education suggests that firms rely on human capital requirements to ensure worker quality.
C. Employers rely on certain signals, such as a college diploma to gauge a potential employee's abilities because it could lower the cost of acquiring information about the person that is not easily observed.
Which of the statements above is true about the signaling hypothesis of education?

Question

Quizplus · Accepted Answer

The signaling hypothesis suggests that education serves as a signal to employers about a potential employee's abilities, as stated in C. It does not necessarily imply that college graduates are more productive, which is why A is incorrect. B is incorrect because the hypothesis focuses on signals rather than human capital requirements.

Consider the Following Statements About the Signaling Hypothesis of Education