How education is able to sort workers according to their unobserved attributes?

Education serves as a signal of potential and ability, allowing employers to infer unobserved attributes such as intelligence, work ethic, and critical thinking skills. By completing educational programs, individuals demonstrate their capacity to learn and adapt, which can correlate with job performance. Additionally, education often provides opportunities for networking and skill development, further differentiating candidates in the labor market. Thus, education acts as a sorting mechanism, helping employers identify the most suitable candidates based on inferred qualities.