Suppose that low-ability workers have productivity of D, while high-ability workers have productivity of A, where A > D. Firms can not tell low-ability workers from high-ab
Exercise 1 (Job Market Signaling - 20 points). Suppose that low-ability workers have productivity of D, while high-ability workers have productivity of A, where A > D. Firms can not tell low-ability workers from high-ability workers ex ante, but can observe a worker’s education level...