Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/128447 
Year of Publication: 
2016
Series/Report no.: 
CESifo Working Paper No. 5741
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
We propose a signaling model of student enrollment dynamics based on probabilities of completion of studies, under different rationality assumptions. There are two types of students and two schools. School of graduation serves as a signal of student productivity to prospective employers. The benchmark case is when both students and employers are rational. We, then, relax rationality assumptions and show that, while intermediate dynamics becomes more complex, possible long run equilibria stay essentially the same. Importantly, comparative statics can be quite surprising and differ significantly from the full rationality case.
Subjects: 
job market signaling
university selection
enrolment dynamics
dropout rate
JEL: 
I20
J24
D82
D83
D84
Document Type: 
Working Paper
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