In the case of hiring decisions, there is asymmetric information between the employee and the employer.

In the case of hiring decisions, there is asymmetric information between the employee and the employer. We have already seen (question 9) that one way to fight against such asymmetric information is to offer piece rates in order to weed out less desirable employees. Another way is to use screening – only accept workers who have met some specific criterion.

With this in mind, why might an employer require a four-year college degree for a job where the degree does not necessarily require the training provided by a four-year degree? Do you think such a requirement is a good idea or a bad one? Explain.