Essay
Jaeger and Page (1996)show that if two individuals both have 4 years of college but one doesn't graduate while the other does,the one with a bachelor's degree will earn 25% more,suggesting that the degree signals higher productivity levels for graduates relative to non-graduates.
(a)Assume that students who attend college for four years acquire identical amounts of human capital,regardless of whether they graduate.Why might people who graduate in 4 years be more productive workers than those who attend college for 4 years but do not graduate?
(b)Suggest reasons why the student with the degree might have acquired different human capital in college than the student who attended college for 4 years but did not graduate.
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