Michael Spence

 

 

For other people named Michael Spence, see Michael Spence (disambiguation).

Michael Spence

Born	(1943-11-07) November 7, 1943 Montclair, New Jersey, USA
Nationality	United States
Institution	Harvard University Stanford University SDA Bocconi School of Management New York University
Field	Microeconomics
Alma mater	Harvard University, (Ph.D.) University of Oxford, (B.A.) Princeton University, (B.A.)
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 economist and recipient of the 2001 Nobel Memorial Prize in Economic Sciences, 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.

Spence joined the faculty of New York University Stern School of Business on September 1, 2010.

He is currently a senior fellow at Stanford University's Hoover Institution.

Selected works

• Spence, A. M. (1973). "Job Market Signaling". Quarterly Journal of Economics (The MIT Press) 87 (3): 355–374. doi:10.2307/1882010. JSTOR 1882010. 
• Spence, A. M. (1974). Market Signaling: Informational Transfer in Hiring and Related Screening Processes. Cambridge: Harvard University Press. 
• Spence, A. M. (May 2011). The Next Convergence: The Future of Economic Growth in a Multispeed World. New York: Farrar, Straus and Giroux. 

See also

• List of economists

External links

• Michael Spence Senior Fellow at Hoover Institution, Stanford University
• Signaling in Retrospect and the Informational Structure of Markets 2001 lecture at NobelPrize.org
• Profile and Papers at Research Papers in Economics/RePEc
• Appearances on C-SPAN
• Michael Spence on Charlie Rose
• Works by or about Michael Spence in libraries (WorldCat catalog)
• Spence on Growth at EconTalk
• Website for [1]"The Next Convergence: The Future of Economic Growth in a Multispeed World" by Michael Spence