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Journal Article
The Speed of Employer Learning
Fabian Lange
Journal of Labor Economics
Vol. 25, No. 1 (January 2007), pp. 1-35
Published
by: The University of Chicago Press on behalf of the Society of Labor Economists and the NORC at the University of Chicago
DOI: 10.1086/508730
https://www.jstor.org/stable/10.1086/508730
Page Count: 35
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Topics: Productivity, Learning rate, Cost estimates, Employee productivity, Regression coefficients, Statistical discrimination, Cognition, Economic models, Coefficients, Tuition
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Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
Abstract
The employer‐learning literature finds support for statistical discrimination on the basis of schooling. How economically relevant statistical discrimination is depends on how fast employers learn about workers’ productive types. This article is the first to estimate the speed of employer learning. Employers learn quickly. Initial expectation errors decline by 50% within 3 years. This estimate places an upper bound on the contribution of signaling. This bound varies with the speed of employer learning and with discount rate. For a wide range of parameter values, the contribution of signaling to the gains from schooling is less than 25%.
© 2007 by The University of Chicago