In order to use schooling as a signal:

Question

Quizplus · Accepted Answer

All of the above factors are important for schooling to serve as a signal. The signal must be more costly for low-skilled workers than for high-skilled workers, otherwise, low-skilled workers won't be incentivized to obtain additional schooling. However, the cost of obtaining the signal cannot be so high that high-skilled workers don't value obtaining it. Additionally, firms must be able to easily verify workers' levels of schooling and some people must choose not to complete schooling in order for the signal to be effective.

In Order to Use Schooling as a Signal