Education Signaling and Employer Learning Heterogeneity

An interesting paper based on an idea:

We investigate the implications of heterogeneous employer learning on education signaling and workers sorting across industries. In the equilibrium of our model, higher-ability workers join industries with faster employer learning speeds, resulting in a matching distortion of workers and industries. In addition, our results are robust to varying degrees of asymmetric employer learning, and establish that industry choice itself serves as a signal of worker ability. Finally, our theoretical approach suggests a novel perspective on a heretofore neglected labor market puzzle, i.e., why few of the richest individuals have obtained higher degrees of education.

That is from Yuhan Chen, Thomas Jungbauer, and Michael Waldman.  Via the excellent Kevin Lewis.