characterize the trade–offs between signaling by workers and costly auditing by firms. Auditing is always associated with (partial …), and firms have the option of auditing to learn workers’ productivities. Audits are costly and non–contractible. We … feature new auditing patterns and explain empirical observations in labor economics like wage differentials and comparative …

In Spence's (1973) signaling by education model and in many of its extensions, firms can only infer workers …' productivities from their education choices. In reality, firms also use sophisticated pre-employment auditing to learn workers …' productivities. We characterize the trade-offs between signaling by workers and costly information acquisition by firms. Information …

In Spence's (1973) signaling by education model and in many of its extensions, firms can only infer workers …' productivities from their education choices. In reality, firms also use sophisticated pre-employment auditing to learn workers …' productivities. We characterize the trade-offs between signaling by workers and costly information acquisition by firms. Information …

In Spence's (1973) signaling by education model and in many of its extensions, firms can only infer workers …' productivities from their education choices. In reality, firms also use sophisticated pre-employment auditing to learn workers …' productivities. We characterize the trade-offs between signaling by workers and costly information acquisition by firms. Information …

In Spence’s (1973) signaling by education model and in many of its extensions, firms can only infer workers …’ productivities from their education choices. In reality, firms also use sophisticated pre–employment auditing to learn workers …’ productivities. We characterize the trade–offs between signaling by workers and costly information acquisition by firms. Information …