Michael Spence is a Nobel-prize winning economist, whose most famous research focuses on the job-market signaling model. 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, whose current scholarship focuses on economic policy in emerging markets, the economics of information, and the impact of leadership on economic grow is Chairman of the independent Commission on Growth and Development, a global policy group focused on strategies for producing rapid and sustainable economic growth, and reducing poverty.
Spence graduated from Princeton in 1966 with a degree in philosophy and went on to study mathematics at Oxford as a Rhodes Scholar. Spence is also the former Dean of the Stanford Graduate School of Business and is a professor of economics at New York University's Stern School of Business.