(IME2) Chapter 11 - Video 7: Solving for Pooling Equilibria of Spence's Job Market Signaling Model.

In this episode, I will use a numerical example to explain how we determine the pooling equilibria of Spence's job market signaling model.
It's crucial to watch lecture videos in the proper order to ensure effective learning. This is because the concepts in each video build upon those introduced in previous videos. To help you with this, I recommend you visit my website, www.selcukozyurt.com, for a recommended course outline.

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12:35 If education doesn't increase productivity, and in our population of 100 , 50 are productive and 50 unproductive. If everyone gets and education, the productivity split remains the same. So shouldn't the wage be 12.5 only? As firms have no way of knowing who is productive and who unproductive, so they take an expectation of productivity to decide the wage rate?