In general people with more education earn higher salaries. Economists have offe
ID: 1221506 • Letter: I
Question
In general people with more education earn higher salaries. Economists have offered two explanations of this relationship. The human capital argument says that high schools and colleges teach people valuable skills, and employers are willing to pay higher salaries to attract people with those skills. The signaling argument says that college graduates earn more because a college degree is a signal to employers that a job applicant is diligent, intelligent, and persevering.
1. The ____ implies that a college student who drops out of school one month before graduation should earn much less than a student who graduates.
2. The ____ implies that a college student who drops out of school one month before graduation should earn almost the same as a student who graduates.
Choices:
(a) signaling argument
(b)causation argument
(c)human capital argument
(d)correlation argument
Explanation / Answer
1.) The _ signaling argument ___ implies that a college student who drops out of school one month before graduation should earn much less than a student who graduates.
2.) The __Human Capital Argument__ implies that a college student who drops out of school one month before graduation should earn almost the same as a student who graduates.