Inefficiencies because of Lacking Signaling of Master Degree in Business Administration at the University of the Basque Country.

Unemployment of recently graduated university students in Spain has reached a record level compared with the remaining members of the European Community. At the same time there is no state in the EC with such a high number of students and university graduates. This article tries to show that this fact involves high costs not only for university graduates and the Spanish community but also potential costs for Spanish businesses. The results of the principal-agent theory will be used as theoretical fundament for analysis. Based on the example of the labour market situation of engineers- as well as economic graduates, both in Germany and in Spain, this article shows how the Spanish industry is affected by decreasing signalling power, especially for Spanish university certificates