wages reflect this, with lower pay for greater uncertainty. We use the dispersion of exam grades within a field of education … as an indicator of the unobserved heterogeneity that employers face. We find solid evidence that starting wages are lower …

wages to reflect this. Formal analysis supports the intuition. We use the dispersion of exam grades within a field of … education as an indicator of the heterogeneity that employers face. We find solid evidence that starting wages are lower if the … variance of exam grades is higher and that starting wages are lower if the skew is higher: employers shift quality risk to new …