Journal of Political Economy
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Опубликовано на портале: 24-01-2007
Andrew Weiss
Journal of Political Economy.
1983.
Vol. 91.
No. 3.
P. 420-442.
This paper presents a sorting model of education in with individuals are tested in
school. By assuming that higher-ability individuals are more likely to succeed on
a given test one can construct a sorting model of education that does not hinge on
the more able having lower nonpecuniary costs of schooling. Nash equilibria always
exist in this model (even with a continuum of types of individuals); however, some
are "unreasonable." To eliminate these unreasonable Nash equilibria, more restrictive
definitions of equilibrium are proposed. I also show that when schooling affects
productivity - and therefore a worker's probability of passing the test--a sorting
equilibrium may be characterized by too little investment in education. This paper
extends the important work of Spence (1974), Stiglitz (1975), and Riley (1979a, 1979b)
on sorting theories of education by modeling the educational choices of individuals
in game-theoretic terms and making two assumptions: (1) individuals are not perfectly
informed about their own productivity, and (2) individuals are tested upon their
completion of schooling. I also combine the sorting and human capital analyses by
allowing education to increase productivity and show that if education increases
the productivity of workers as well as enabling the more able workers to sort themselves,
these sorting effects may lead to underinvestment in education. This result contradicts
the main normative result of screening models of education: If skills are hierarchical,
so that if Joe is more productive than Jim at any job he is more productive at all
jobs, there is overinvestment in schooling as workers use education to signal their
abilities. Although in a pure sorting model education always leads to overinvestment
in education while human capital models lead to optimal investment, when both effects
are modeled there may be too little investment in education. This result holds even
if the more able learn faster in school.

