Three Essays in Labor Economics

Abstract

The three present essays approach education, human capital signaling, and wage theories, and as such, fit squarely in the field of labor economics. Labor, as one of the three factors of production, has unique and important characteristics. Laborers may seek training and education to change or add to their skill sets to achieve favorable job market outcomes, and employers may seek such laborers via some signal. There has been much debate in the economics literature about the effects of so-called human capital accumulation versus the mere signal of accumulated human capital. The first essay exploits an opportunity to verify the accuracy of one such signal, self-reporting academic performance. There are errors, and it is revealed that the errors are in fact dependent on certain personal characteristics, meaning the self-reported data is a biased measure of actual school performance. The second essay interprets the same error in self-reported academic performance as a measure of academic self-appraisal and uses this measure as a predictor of college outcomes. A pattern of misreporting academic performance and realized college outcomes like applying, acceptance, attendance, and achieving degrees is shown. Finally, the third essay walks through modern interpretations and models of the wages fund doctrine, the history of which extends back to the Classical economists. A synthesized model, based on models and ideas from authors writing after the marginalist revolution in economics is offered.