Question

In what ways spence theory of signalling viewed as a contribution in extending the human capital theory?

Answer 1

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.