Abstract

Human capital and market signaling theory are compared using data from the Statistics Canada Survey of Literacy Skills Used in Daily Activities (1990). The results indicate that both theories explain variations in annual income and number of weeks worked. Employers use education credentials (market signaling theory) to select employees who are then rewarded with earnings based on their literacy levels (human capital theory). Implications of these findings for policy and practice are presented.

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May 29th, 9:44 AM

Human Capital Versus Market Signaling Theory: The Case with Adult Literacy

Human capital and market signaling theory are compared using data from the Statistics Canada Survey of Literacy Skills Used in Daily Activities (1990). The results indicate that both theories explain variations in annual income and number of weeks worked. Employers use education credentials (market signaling theory) to select employees who are then rewarded with earnings based on their literacy levels (human capital theory). Implications of these findings for policy and practice are presented.