In a labor-market pooling equilibrium with high-skill and low-skill workers and where a costly educational degree is used as a signaling device, all else equal, an increase in the wage differential between high- and low-skill workers leads to
A) an increase in the required minimum share of high-skill workers.
B) a decrease in the required minimum share of high-skill workers.
C) no change in the required minimum share of high-skill workers.
D) None of the above answers are correct.
A
Economics
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