Schooling as Human Capital or a Signal: Some Evidence

A new way is proposed to distinguish between the human capital and the signaling theories of the value of education. If education is a signal, then the essence of the signal should be distilled in the position of an individual in the distribution of education for his cohort. Estimating earnings equations that include both absolute (years) and relative (percentile) measures of education provides a test of the two competing theories. Analyzing two separate panel data sources under a range of alternative specifications, we find that the years measure of schooling has a consistently significant positive effect on earnings, but that the rank measure rarely does. This evidence supports the conclusion that human capital rather than signaling is the predominant explanation of schooling's value.

Measuring Progress Toward Accountable Care

Little information exists about the capabilities required to achieve the ultimate aims of accountable care -- better, less costly care that improves the health of populations -- or about how to measure the "readines" of providers to implement this new model. This paper reports on 59 hospital-based organizations that were members of a collaborative created to support the transition to accountable care. Assessment of 42 capabilities, divided further into 154 specific operating activities, found that the overall state of readiness was modest. Several characteristics appear to be associated with greater readiness to form an accountable care organization (ACO), including a strong patient-centered focus, full or partial ownership of a health plan, and positive relationships with providers in the market, among others. Variation in the patterns of readiness suggests that organizations are pursuing different paths toward accountable care. Additional study of organizations farther along the journey to accountable care is needed