Critics often paint the signaling model of education as weird or implausible. But the model is just a special case of what economists call “statistical discrimination”: using true-on-average stereotypes to save time and money.17 Statistical discrimination is everywhere. The elderly pay higher life insurance premiums because the elderly tend to die sooner. Cab drivers are more willing to pick up a young man in a suit than a young man in gang colors because the latter is more likely to rob him. Statistical discrimination may be unfair and ugly, but it’s hardly weird or implausible. Why is it any
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