-
Essay / Disadvantages of Signaling Theory - 538
Signaling theory was proposed by Michael Spence who says that people are selected based on their innate abilities and the levels of education they have achieved, because the theory says that abilities demonstrated by education levels signal that a particular man/woman has good abilities and is eligible, resulting in the more educated he/she is, the higher salary he/she earns . Signaling theory is based on two assumptions: first, individuals have different innate productivity abilities, second, additional levels of education. results in more costs that differ between low- and high-productivity workers, meaning that people who learn quickly incur fewer costs, but those who are not able to learn quickly incur more training costs. In signaling theory, the potential of any person cannot be seen, so the only factor to judge a person is their level of education. We therefore deduce that the one who has more productivity levels has more productivity. The main disadvantage is that in order to show that he or she is more productive, he or she must undergo more training, which, as we saw above....