DEREK: Yea, because employers care more about a scrap of paper than what you can do. BRYAN: You’re getting ahead of me. When education raises your income, economists call that “the education premium.” Part of the premium exists because school makes you more productive. That’s the human capital share. The rest of the premium exists because school makes you look more productive. That’s the signaling share. The “human capital/signaling breakdown” is both shares, side by side; 70/30 means “70% human capital, 30% signaling.”
