An Analysis of Variation in Human Capital Investment and Sectoral Wage Differentials for Women

Hang Anh Nguyen

doi:10.4236/ojbm.2020.84093

Abstract

This research discusses the variation in human capital investment of women that led to the wage differentials between industrial sectors in the United States from 1980 to 2016. Using the Current Population Survey data, this research found that working in the manufacturing sector offered female workers with higher wages. However, return to education in monetary term was higher in the service sector than in the manufacturing sector. Male faced the same situation in the labor market yet at different rates. In addition, regression results showed that education had the highest impact on women’s wage and return to education was higher for women than for men. These findings correspond with previous literature and suggest that education increased the earning capacity for women, especially for those who worked in the service-producing sector.

Highlights

The concept of human capital investment was first introduced by Becker (1965) as follows
These findings correspond with previous literature and suggest that education increased the earning capacity for women, especially for those who worked in the service-producing sector
This research examined the return to human capital investment for female workers using the Current Population Survey by the United States Census Bureau and the Bureau of Labor Statistics

Summary

Introduction

The concept of human capital investment was first introduced by Becker (1965) as follows. Human capital investments are “activities that influence future monetary and psychic income by increasing the resources in people”. An investment in human capital increases a person’s chance in the labor market, improves labor productivity and most commonly, gives rise to that person’s future earnings. Empirical studies showed that the rate of return to education varies across races, genders, educational attainments as well as across sectors (Weisbrod & Karpoff, 1968; Madden, 1978; Krueger & Summers, 1988).

Objectives

Methods

Findings

Discussion

Conclusion