In what way ‘spence's theory of signalling' viewed as a contribution in extending the human capital theory?
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The theory of signaling tells us that
we can categorize the employees açcording to some signals like education,experiance etc.
According to the theory of. signaling
the human capital can be divided as under
1)High production workers
2)Low production workers
In the year 1970 the employers did not have many measure to accurately judge which employed will be best for us.They used to categorize
the human capital through signaling.
we can categorize the employees açcording to some signals like education,experiance etc.
According to the theory of. signaling
the human capital can be divided as under
1)High production workers
2)Low production workers
In the year 1970 the employers did not have many measure to accurately judge which employed will be best for us.They used to categorize
the human capital through signaling.
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Answer:
According to Spence’s theory of signaling, the employees can be categorized as per their education, experience etc. Hence the human capital is divided into two namely: High production workers and Low production workers.
Explanation:
Signaling theory was developed by Michael Spence initially. According to this theory, the ability level of an employer is send as a signal after attaining education credentials. These details enabled the employer to differentiate between low and high ability workers.
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