Job Market Signaling

Job market signaling is the idea that job seekers send signals to employers to demonstrate their suitability for a position, often through education, certifications, or experience. These signals help employers assess a candidate’s abilities and work ethic without directly observing their skills during the hiring process. For example, obtaining a college degree can signal intelligence and discipline. Signaling reduces uncertainty for employers and helps match the right candidates to jobs more efficiently. Essentially, individuals use certain actions or credentials to "stand out" and communicate their potential value to potential employers.