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The signaling value of a high school diploma
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Journal Article
The signaling value of a high school diploma
2014
Overview
This paper distinguishes between the human capital and signaling theories by estimating the earnings return to a high school diploma. Unlike most indicators of education (e.g., a year of school), a diploma is essentially a piece of paper and, hence, by itself cannot affect productivity. Any earnings return to holding a diploma must therefore reflect the diploma’s signaling value. Using regression discontinuity methods to compare the earnings of workers who barely passed and barely failed high school exit exams—standardized tests that students must pass to earn a high school diploma—we find little evidence of diploma signaling effects.
