Michael Spence

Birth	November 7, 1943 (1943-11-07) (age 66) Montclair, New Jersey, USA
Nationality	United States
Institution	Harvard University Stanford University
Field	Microeconomics
Alma mater	Harvard University (Ph.D.) University of Oxford (B.A.) Princeton University (B.A.) University of Toronto Schools of the University of Toronto (Middle School and High School)
Influences	Kenneth Arrow Thomas Schelling Richard Zeckhauser
Contributions	Signaling theory
Awards	John Bates Clark Medal (1981) Nobel Memorial Prize in Economics (2001)
Information at IDEAS/RePEc

Andrew Michael Spence (born November 7, 1943) is an American-born, Canadian-raised economist and recipient of the 2001 Nobel Prize in Economics, along with George A. Akerlof and Joseph E. Stiglitz, for their work on the dynamics of information flows and market development. He conducted this research while at Harvard University. In the current technological environment—with ever more abundant information flows about market development, prices, profit margins, investment instruments and rates of return—their work is more relevant than ever.

Michael Spence is probably most famous for his job-market signaling model, which essentially triggered the enormous volume of literature in this branch of contract theory. In this model, employees signal their respective skills to employers by acquiring a certain degree of education, which is costly to them. Employers will pay higher wages to more educated employees, because they know that the proportion of employees with high abilities is higher among the educated ones, as it is less costly for them to acquire education than it is for employees with low abilities. For the model to work, it is not even necessary for education to have any intrinsic value if it can convey information about the sender (employee) to the recipient (employer) and if the signal is costly.

Spence did his middle and high school education at the University of Toronto Schools of the University of Toronto. In 1966, he was awarded a Rhodes Scholarship at Oxford University upon graduation from Princeton University with a degree in Philosophy. He studied Mathematics at Oxford. Spence is a former Dean of the Stanford Graduate School of Business and is presently the Chairman of the Commission on Growth and Development.

[edit] Selected works

• Spence, A. M. (1973). "Job Market Signaling". Quarterly Journal of Economics 87 (3): 355–374. http://www.jstor.org/stable/1882010. 
• Spence, A. M. (1974). Market Signaling: Informational Transfer in Hiring and Related Screening Processes. Cambridge: Harvard University Press. 

[edit] See also

• List of economists

[edit] External links

• Michael Spence's Biography
• A technical summary of the work.
• Autobiography
• IDEAS/RePEc