The signalling value of education across genders

Abstract

This study examines gender discrimination and the possibility that education is more important for signalling ability among women than men. As social networks tend to run along gender lines and managers in the labour market are predominantly male, it may be more difficult for women to signal their ability without college credentials. The Lang and Manove (Am Econ Rev 101(4):1467–1496, 2011) model of racial discrimination and educational sorting is applied to examine the gender gap in schooling attainment. The model is empirically estimated for whites, blacks and Hispanics separately, with the results among whites consistent with education being more valuable to women due to signalling. For 90% of the whites in the sample women choose a higher level of education, given their ability, than men. Women on average obtain 0.5–0.7 extra years of schooling compared to men with the same ability score.