Continuing Education, Job Training, and the Growth of Earnings Inequality

Abstract

Although it is well established that changes in the value of formal education can partly explain the increase in earnings inequality in the United States during the past three decades, less attention has been paid to the possible role of post-school training. Using data from cohorts of the National Longitudinal Surveys, the author finds that young men entering the labor market beginning in the late 1960s and those entering in the early 1980s differed little in the average incidence of training or earnings premiums associated with training, but further analysis shows that shifts in training favoring more educated workers can account for more than 40% of the observed increase in college-high school earnings differences among young men. Changing patterns of continuing learning do not, however, help explain the growth in earnings differences within equally educated groups.