Human capital theory and signaling theory

This work deals with the Becker human capital theory and Spence signaling theory that explain why education brings higher earnings. Under the first theory, the increased productivity of individuals and the corresponding higher pay higher marginal product. Second theory offers an explanation in terms of innate abilities, the higher innate ability, the higher wage rate. The next section is formulated hypothesis and the selection data set. The empirical part includes an examination of how firms behave in practice. Using the information gathered, and regression analysis is to evaluate whether using human capital theory, or rather signaling theory. The results are ambiguous, and therefore there can not be drawn clear conclusion