Imperfect Signals
Georg Graetz, Uppsala University, Institute of Labor Economics
I explore human capital accumulation, signaling, and employer learning under the assumption that some educational choices are difficult to observe. I distinguish between visible but coarse aspects of education, such as college completion, and finely differentiated but partly hidden aspects, such as the amount of productive knowledge acquired. When educational choices are difficult to observe, their privately optimal level may be above or below the social optimum. I test for the direction of inefficiency in data from the US and Sweden. Preliminary results suggest that due to information frictions, students acquire inefficiently little productive knowledge each year they spent in education. At the same time, students likely spend more time in education than under a perfect-information counterfactual scenario.
About the speaker:
Georg Graetz is an associate professor in economics at Uppsala University, and a visiting research fellow at IZA. His research interests include the impact of technological change on the labor market and the economics of education. In the area of technological change, he has studied the effect of automation on labor demand; the impact of task-biased technological change on occupational choice and wage inequality; and he is currently investigating the consequences of the COVID-19 pandemic for technology adoption. In education economics, he has studied the wage returns to educational signals, and their implications for theories of educational choice; the intergenerational transmission of education; and gender differences in test scores.