Lisa Simon from the ifo Center for the Economics of Education on the impact of skill signals on hiring decisions Individuals make costly investments (in terms of time, effort or money) to signal skills to potential employers, such as getting good grades in school or college or learning a foreign language. However, there is little understanding on which skill investments will pay off in finding employment upon entering the labour market. Labour market entrants use skill signals to convey productivity to future employers as these cannot directly observe applicantsa?? skills in the first stage of the hiring process (i.e. written applications including CVs). While there is a well-known relationship between cognitive or non-cognitive skills and individual labour market outcomes, the role of skill signals themselves is less well established. Analysing and isolating the effect of how skill signals such as grade-point-averages (GPA) affect labour market outcomes is difficult for at least two reasons: First, different types of skills are usually correlated, i.e. a smart person with a high GPA usually also has other good skills. Second, we do not know from observational data, to which extend a potential employer really observes skill signals.

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2 February 2018

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CVER Blog

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http://cver-blog.blogspot.com/2018/02/which-skill-signals-matter-truly-in.html

This Blog is published under the centre's Education programme.