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"In most job markets the employer is not sure of the productive capabilities of an individual at the time he hires him. Nor will this information necessarily become available to the employer immediately after hiring. The job may take time to learn. Often specific training is required. And there may be a contract period within which no recontracting is allowed. The fact that it takes time to learn an individual's productive capabilities means that hiring is an investment decision. The fact that these capabilities are not known beforehand makes the decision one under uncertainty. To hire someone, then, is frequently to purchase a lottery. In what follows, I shall assume the employer pays the certain monetary equivalent of the lottery to the individual as wage. If he is risk-neutral the wage is taken to be the individual's marginal contribution to the hiring organization."


 * &mdash;Michael Spence, Job Market Signaling, 1973

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