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Although the human capital (schooling) and signaling models have different underlying assumptions regarding the productivity enhancing role of education, they both predict a positive correlation

Although the human capital (schooling) and signaling models have different underlying assumptions regarding the productivity enhancing role of education, they both predict a positive correlation between annual earnings and additional years of education. As a result, policy makers should encourage the governments around the world to subsidize university education through programs such as HECS and Fee-Help irrespective of the true extent of each model's role in the actual process of human capital investments. This is particularly relevant in situations like the current "after-Covid" Australian labour market with a record low unemployment rate and labour shortages in many sectors of the economy.

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