Which of the following best expresses the idea that higher education often results in higher earnings?

The selection of signalling theory captures the concept that higher education can indicate or 'signal' a candidate's abilities, skills, and commitment to potential employers. In this context, individuals who pursue advanced education may be perceived as more capable and qualified compared to those who have not attained similar levels of education. This signal can lead to higher earnings because employers may be willing to pay a premium for the perceived qualities that a degree represents, including better job performance, reliability, and dedication.

In the labor market, education serves not only to equip individuals with specific knowledge and skills but also as a marker of motivation and cognition that influences employer perceptions. Hence, the investment in higher education can lead to improved job opportunities and higher wages, aligning well with the argument made by signalling theory.

While other theories may touch on factors that influence wages, such as negotiated wages and the dynamics of the labor market, none convey the direct relationship between educational attainment and the resulting perception by employers that leads to increased earnings as effectively as signalling theory does.