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Signalling, Inequality and the Social Structure
Author(s) -
Ferrer Ana M.
Publication year - 2005
Publication title -
economica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.532
H-Index - 65
eISSN - 1468-0335
pISSN - 0013-0427
DOI - 10.1111/j.0013-0427.2005.00428.x
Subject(s) - meritocracy , inequality , social position , social mobility , balance (ability) , economics , position (finance) , signalling , social status , social inequality , labour economics , microeconomics , sociology , social change , market economy , economic growth , social science , biology , finance , mathematical analysis , mathematics , neuroscience
This paper proposes a theory of endogenous transmission of social status through signalling in the labour market. A signalling game is analysed, in which education, acting as a signalling good, determines one's position in society. The economy's degree of inequality is shown to be a determinant of whether a society is ‘aristocratic’, where high income is the source of social standing, or ‘meritocratic’, bestowing status on high ability. Each social structure shows a different balance between production efficiency and social factors such as equality or mobility.