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Working Paper No. 29

A Procedure for Testing the Signalling Hypothesis

Working Paper
Reference
Albrecht, James W. (1980). “A Procedure for Testing the Signalling Hypothesis”. IFN Working Paper No. 29. Stockholm: Research Institute of Industrial Economics (IFN).

Author
James W. Albrecht

This paper develops a procedure for testing the signaling hypothesis as advanced by Spence, et. al. The approach used is to examine directly the question of whether employers use education for purely informational purposes in their hiring decisions. An application of the method to a recruitment by the Swedish auto manufacturer Volvo is presented.