Hiring Without Signals
Readers of Econlog who read co-blogger Bryan Caplan’s posts know that Bryan has posted a lot on a college degree as an expensive signal to potential employers. Here are 88 posts Bryan has written on signaling.
I find Bryan’s argument and evidence persuasive. Like some of his critics, though, I have often wondered why employers don’t figure out cheaper ways of getting information about potential employees. You might argue that the expense is not on the employer but on the employee. But if an employer can find a good employee who lacks a college degree, the employer can, all other things equal, pay less.
In Wednesday’s Wall Street Journal is an interesting news story by Rachel Feintzeg titled “Why Bosses Are Turning to ‘Blind Hiring’.” (WSJ, January 6, 2015, p. B4) [ed. note: see here for the article on archive.is to bypass the paywall].