Question

Employers often list a four-year college degree as a requirement for applicants for certain jobs. Is this practice consistent with the screening explanation for education, the human capital story, both, or neither? Explain.

Answer 1

A four year college does not ensure that the applicants will perform better than those who do not possess that degree. However, it performs the role of signalling that the quality of the college graduate is better and will add more value to the company. On the other hand, the human capital theory requires workers to exhibit actual skills required for the job and applicants are screened on the basis of their proficiency with those particular skills. Education is supposed to impart technical and practical skills required to perform jobs well. So, a person with a college degree is likely to possess those skills than a person without a degree, but whether he actually has those skills can only be ensured through further tests. Therefore, screening applicants on the basis of a college degree is consistent with the education signalling explanation, but in order to check if it's consistent with the human capital theory, further screening has to be done to gauge the ability of the applicants.