Dr. Caplan,
Many fortune 500s pay for their new recruits MBAs. Rationale for this being something like, “A MBA increases the value produced by the worker therefore we pay for their education”.
Does this phenomenon disconfirm your education signaling theory?
@bryan_caplan
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Few of the MBAs I know accept this rationale. The standard one is actually, "I can't get promoted until I jump through the meaningless hoops of an MBA."
Is the theory that education (e.g. an MBA) is pure signaling? Or is it that we can't disaggregate how much of the credential is human capital accumulation and how much is signaling?
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As I understand it, Caplan is trying to move the Overton Window from 60-80% Human Capital to 10-40%.
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