Question: Jaeger and Page (1 996) show that if two individuals both have 4 years of college but one doesn't graduate while the other does, the one with a bachelor's degree will earn 25% more, suggesting that the degree signals higher productivity levels for graduates relative to non-graduates.

Part A: Assume that students who attend college for four years acquire identical amounts of human capital, regardless of whether they graduate. Why might people who graduate in 4 years be more productive workers than those who attend college for 4 years but do not graduate?

Part B: Suggest reasons why the student with the degree might have acquired different human capital in college than the student who attended college for 4 years but did not graduate.

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