Information Asymmetry, Education Signals and the Case of Ethnic and Native Germans

28 Pages Posted: 6 Jul 2009

See all articles by Stephan O. Hornig

Stephan O. Hornig

FHS Kufstein Tirol

Horst Rottmann

University of Applied Sciences Amberg-Weiden; CESifo (Center for Economic Studies and Ifo Institute)

Rüdiger Wapler

Institute for Employment Research (IAB), Germany

Date Written: June 2009

Abstract

This paper analyses the effects of education signals for Ethnic Germans and Germans without a migration background ('Native Germans'). We base our analysis on a sorting model with productivity enhancing effects of education. We compare whether the signalling value differs between the migrants and non-migrants in the German labour market. Starting from the theoretical result that only a separating equilibrium can exist, we find substantial empirical differences between Ethnic and Native Germans with the same formal education level. This empirical analysis is done with a completely new dataset based on administrative data from the German Federal Employment Agency.

Keywords: sorting theory, human-capital theory, returns to education, migration

JEL Classification: J24, J31, F22

Suggested Citation

Hornig, Stephan O. and Rottmann, Horst and Wapler, Rüdiger, Information Asymmetry, Education Signals and the Case of Ethnic and Native Germans (June 2009). CESifo Working Paper Series No. 2683, Available at SSRN: https://ssrn.com/abstract=1428771 or http://dx.doi.org/10.2139/ssrn.1428771

Stephan O. Hornig

FHS Kufstein Tirol ( email )

Andreas Hofer Str. 7
Kufstein, 6330
Austria

Horst Rottmann (Contact Author)

University of Applied Sciences Amberg-Weiden ( email )

Hetzenrichter Weg 15
D-92637 Weiden i.d. Opf
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Rüdiger Wapler

Institute for Employment Research (IAB), Germany ( email )

Regensburgerstr. 104
Nuremberg, 90478
Germany

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