IZA DP No. 683: Is Education Used as a Signaling Device for Productivity in Developing Countries? Evidence from Ghana
Eric Strobl
published as "Do employers use education as a signal for ability in developing countries? Evidence from Ghana" in: Applied Economics Letters, 2004, 11(4), 259-261
This paper investigates whether education is used as a signaling device for worker
productivity in developing countries. To do such we employ a simple test of employer
learning on Ghana manufacturing data. We find no evidence of educational signaling for
individuals who were hired through direct contacts in the firm, and thus for workers for which
employers arguably have more information about their true abilities. In contrast, education
acts as signal for workers who were hired through more formal channels, although only for
those that do not receive on-the-job-training.
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