An employer has narrowed a list of applicants down to two individuals. The two candidates look nearly identical on paper, but one of them has earned a four-year college degree. The employer decides to offer employment to the college graduate. What does this example illustrate?(1 point)

Question

Responses

the substitution effect
the substitution effect

the learning effect
the learning effect

the screening effect
the screening effect

the income effect

Answer 1

This example illustrates the screening effect. The employer uses the educational attainment (a four-year college degree) as a signal to differentiate between otherwise similarly qualified candidates. The assumption is that the degree may correlate with certain desirable attributes, such as skills, work ethic, or knowledge.