Human Capital Earnings Function Research Articles

E-Learning and Economic Well-Being of Graduates: Applying the Human Capital Earning Function to Distance Education

The study aims to evaluate the effectiveness of e-learning in raising the income level of graduates. Based on a sample of the distance education program students in the Bachelor of Business Administration. The study applies the net present value, and regression model to estimate the Human Capital Earnings Function presented by Mincer (1974). The results showed that the NPV of the expected cost and earnings for graduates that the program will cause an improvement of the standard of living of graduates. Moreover, the regression results indicate that the most important factors affecting the expected wages are those objective factors such as experience and job stability, as they are superior to subjective factors such as marital status and age, the technical expertise comes between these two groups. The study recommends more use of modern technologies in the field of distance education, for all societies without restrictions of time or place, in order to achieve the spread of knowledge, to raise the efficiency and income of workers in the economy. Provide the opportunity for those who were unable to continue their university education, due to socioeconomic conditions.

Religious affiliation and earnings: Evidence from Brazil

This article examines the relationship between wages and religious affiliation for Brazil using conventional human capital earnings functions. Data drawn from the 1991, 2000, and 2010 Brazilian Censuses were analysed for men and women. Our results indicate that Brazilian men (women) who identified as Traditional Protestants received a small wage premium 2.6% (1.4%) compared to those who identified as Catholic—the largest religious denomination in Brazil—even after controlling for a range of demographic and social characteristics. In contrast, Brazilian men (women) who identified as Pentecostal Protestants received a sizeable wage penalty of 4.3% (5.8%). In an effort to explain the wage gap between different religious affiliations in Brazil, we also conducted a conventional Oaxaca-Blinder decomposition.

Childhood Bullying and Labor Market Outcomes in The United States

This paper contributes to a nascent economic literature on bullying. Using the National Longitudinal Survey of Youth 1997 data, I explored the relationship between childhood bullying and later earnings. Since males and females are usually subject to different kinds of bullying and coping strategies vary with age, I distinguished between pre-teen and teenage bullying by gender. After delineating the pathways by which being bullied could potentially lead to lower earnings, the analysis first considered the probability of being bullied either as a teenager or before the age of 12. Next, after a simple ordinary least squares analysis of a human capital earnings function, a detailed propensity score analysis with multiple matching schemes was undertaken separately for males and females, further subdivided by when bullying had occurred. Results indicated males bullied as teenagers had earnings 23% lower than their non-bullied counterparts. Females did not suffer this penalty, nor did children who were bullied only below the age of 12. However, being bullied in childhood increased significantly the probability of being bullied later. In terms of human capital formation and possible impact on later productivity, teen bullying may be affecting men the most. Current findings may also be useful in encouraging a targeted focus on those who may be in greater danger of being bullied. Children who have changed schools several times, males with a learning disability, or a vision, speech or hearing problem, and females with some kind of deformity would be targeted significantly more.

Investment and interruption: effects of the US experience on the earnings of return migrants in Mexico

ABSTRACTMigration is widely viewed as an investment in human capital. However, due to the imperfect transferability of skills and knowledge across countries, migration trips are also career interruptions, especially for return migrants who may meanwhile experience depreciation of home country-specific skills. This article demonstrates that migration experience increases return migrants’ earnings in the home country on the condition that the migration stay is sufficiently long and mostly uninterrupted. Employing the revised human capital earnings function, the empirical study shows that only a barely interrupted US experience longer than five years, regardless of the legal status of the migration trips, predicts higher earnings of male return migrants in Mexico than comparable non-migrants. Robust findings emerge controlling for unobserved individual \\]acteristics or using instrumental variables to deal with the self-selection and endogeneity. Short migration stays in the US and frequent traveling provide return migrants no wage premium in Mexico.

Success in entrepreneurship: a complementarity between schooling and wage-work experience

What makes a successful entrepreneur? Using Danish register data, we find strong support for the hypothesis that theoretical skills from schooling and practical skills acquired through wage-work are complementary inputs in the human capital earnings function of entrepreneurs. In fact, we find that schooling only pays off in combination with wage-work experience, as the returns to schooling are insignificant when the entrepreneur has no wage-work experience. The results are extremely robust toward more flexible specifications, including fixed-effect estimations dealing with unobserved heterogeneity. Furthermore, the interaction term is negligible for non-entrepreneurs, suggesting that the complementarity between wage-work experience and schooling is a distinctive characteristic of entrepreneurs.

Nash Bargaining and the Wage Consequences of Educational Mismatches

The paper provides a theoretical foundation for the empirical regularities observed in estimations of wage consequences of overeducation and undereducation. Workers with more education than required for their jobs are observed to suffer wage penalties relative to workers with the same education in jobs that only require their educational level. Similarly, workers with less education than required for their jobs earn wage rewards. These departures from the Mincer human capital earnings function can be explained by Nash bargaining between workers and employers. Under fairly mild assumptions, Nash bargaining predicts a wage penalty for overeducation and a wage reward for undereducation, and further predicts that the wage penalty will exceed the wage reward. This paper reviews the established empirical regularities and then provides Nash bargaining results that explain these regularities.

Learning from experience or learning from others?: Inferring informal training from a human capital earnings function with matched employer–employee data

A model of informal training which combines learning from own experience and learning from others is proposed in this paper. It yields a closed-form solution that revises Mincer–Jovanovic's [Mincer, J., Jovanovic, B., 1981. Labor mobility and wages. In: Rosen, S. (Ed.), Studies in Labor Markets. Chicago University Press, Chicago, pp. 21–64] treatment of tenure in the human capital earnings function. We estimate the structural parameters of this non-linear model on a large French cross-section with matched employer–employee data. We find that workers on average can learn from others 10% of their own human capital on entering one plant, and catch half of their learning from others’ potential in just 2 years. The private marginal returns to education are declining with education as more educated workers have less to learn from others and share the social returns of their own education with their less qualified co-workers. The potential for learning from others on the job varies across jobs and establishments, and this provides a new distinction between imitation jobs and experience jobs. Workers in imitation jobs, who learn most from others, tend to have considerably longer tenure than workers in experience jobs. Although workers in experience jobs can learn little from others, we find that they learn a lot by themselves. We document several analogies between the imitation jobs/experience jobs “dualism” and the primary/secondary jobs and firms’ dualism implied by the dual labor market theory. However, our binary classification of jobs depicts the data more closely than the dual theory categorization into primary-type and secondary-type establishments. Competition prevails between jobs and firms but jobs differ by their learning technology.

Atypical Work and Pay

Atypical work has long been criticized in popular debate as providing poorly compensated, precarious employment. Yet the empirical evidence is both incomplete and mixed. The main contribution of the present paper is to estimate wage differences for the full set of these alternative work arrangements while simultaneously controlling for observed demographic characteristics and unobserved person‐specific fixed effects. The paper also allows for the skewness in atypical worker earnings while retaining the Mincerian human capital earnings function. Our improved estimates are consistent with some of the more optimistic findings reported in the literature, the caveat being that we are examining here only the wage component of the total compensation package.

The relationship between religion and earnings: recent evidence from the NLS Youth Cohort

Does religious and denominational background affect earnings and human capital investment? This paper examines religious background and human capital formation for a sample of males from the year 2000 wave of the National Longitudinal Survey Youth 1979 Cohort. This survey provides information that makes it possible to control better for many components of family background in order to isolate the impact of religion and denomination. The paper contains results from analyses of men within broad religious categories as well as within various Protestant denominations, and reports results for different racial and ethnic groups. The method used for the analysis is the estimation of human capital earnings functions. The paper finds evidence that both men raised as Catholics and men raised as Jews have higher earnings, holding other characteristics constant.

Jacob Mincer, Experience and the Distribution of Earnings

This paper reviews Jacob Mincer's contributions to the analyses of earnings and the distribution of earnings through his pioneering focus on labor market experience or on-the-job training. It begins with a brief discussion of the theoretical literature on the distribution of earnings in the pre-Mincer period, and then discusses his analysis of human capital and earnings developed in his 1957 doctoral dissertation and 1958 Journal of Political Economy (JPE) article. Further analyses of on-the-job training, and in particular estimates of the rate of return from on-the-job training, are presented in his 1962 JPE paper. The synergy between Mincer and Becker during the 1960s is discussed, as is the development of the schooling-earnings function by Gary S. Becker and Barry R. Chiswick (1966). Jacob Mincer extended this relationship by incorporating experience to form the “human capital earnings function” in his Schooling, Experience and Earnings (1974). Subsequent modifications, extensions, tests of robustness and the wide applicability of the human capital earnings function are presented.

Convexity and Sheepskin Effects in the Human Capital Earnings Function: Recent Evidence for Filipino Men

AbstractThe issue of possible non‐linearities in the relationship between log wages and schooling has received a good deal of attention in the literature. This paper uses data from a recent, high quality household survey for the Philippines, the 1998 Annual Poverty Indicator Survey (APIS), to test the fit of the log‐linear specification for Filipino men. The results are based on a number of estimation strategies, including spline regressions, and semi‐parametric regressions with a large number of dummies for years of schooling and experience. The basic conclusions of the paper are two. First, there appear to be large differences between the rates of return to education across levels in the Philippines. In particular, the returns to both primary and secondary education are lower than those for tertiary education, a difference which persists even after correcting for differences in direct private costs across levels. Second, within a given level, the last year of schooling is disproportionately rewarded in terms of higher wages. That is, there are clear sheepskin effects associated with graduation from primary school, secondary school, and university.

Jacob Mincer, Experience and the Distribution of Earnings

This paper reviews Jacob Mincer's contributions to the analyses of earnings and the distribution of earnings through his pioneering focus on labor market experience or on-the-job training. It begins with a brief discussion of the theoretical literature on the distribution of earnings in the pre-Mincer period, and then discusses his analysis of human capital and earnings developed in his 1957 doctoral dissertation and 1958 Journal of Political Economy (JPE) article. Further analyses of on-the-job training, and in particular estimates of the rate of return from on-the-job training, are presented in his 1962 JPE paper. The synergy between Mincer and Becker during the 1960s is discussed, as is the development of the schooling-earnings function by Gary S. Becker and Barry R. Chiswick (1966). Jacob Mincer extended this relationship by incorporating experience to form the “human capital earnings function” in his Schooling, Experience and Earnings (1974). Subsequent modifications, extensions, tests of robustness and the wide applicability of the human capital earnings function are presented.

Marriage Markets, Labor Markets, and Unobserved Human Capital: An Empirical Exploration for South-Central India

Previous articleNext article No AccessMarriage Markets, Labor Markets, and Unobserved Human Capital: An Empirical Exploration for South-Central IndiaJere Behrman, Nancy Birdsall, and Anil DeolalikarJere Behrman Search for more articles by this author , Nancy Birdsall Search for more articles by this author , and Anil Deolalikar Search for more articles by this author PDFPDF PLUS Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinkedInRedditEmail SectionsMoreDetailsFiguresReferencesCited by Economic Development and Cultural Change Volume 43, Number 3Apr., 1995 Article DOIhttps://doi.org/10.1086/452170 Views: 12Total views on this site Citations: 17Citations are reported from Crossref Copyright 1995 The University of ChicagoPDF download Crossref reports the following articles citing this article:Momoe Makino Female labour force participation and dowries in Pakistan, Journal of International Development 24 (Mar 2021).https://doi.org/10.1002/jid.3537Momoe Makino Marriage, dowry, and women’s status in rural Punjab, Pakistan, Journal of Population Economics 32, no.33 (Jul 2018): 769–797.https://doi.org/10.1007/s00148-018-0713-0Momoe Makino Dowry in the absence of the legal protection of women’s inheritance rights, Review of Economics of the Household 17, no.11 (Jun 2017): 287–321.https://doi.org/10.1007/s11150-017-9377-xJohanna Åström, Robert A. Nakosteen, Olle Westerlund, Michael A. Zimmer Twice chosen: Spouse matching and earnings among women in first and second unions, The Social Science Journal 50, no.33 (Dec 2019): 277–288.https://doi.org/10.1016/j.soscij.2013.05.004Kenjiro Yagura Does Labour Migration Offer Opportunities for Meeting Prospective Spouses? The Case of Migrant Workers in Cambodia, Population, Space and Place 18, no.33 (Jul 2011): 277–294.https://doi.org/10.1002/psp.683Md. Abul Basher Promotional role of microcredit: Evidence from the Grameen Bank of Bangladesh, Journal of International Development 34 (Jan 2009): n/a–n/a.https://doi.org/10.1002/jid.1583Nicolas G. Vaillant, Valérie Harrant Determinants of the likelihood of finding the right partner in an arranged marriage: Evidence from a French matchmaking agency, The Journal of Socio-Economics 37, no.22 (Apr 2008): 657–671.https://doi.org/10.1016/j.socec.2006.12.055Marcel Fafchamps, Agnes R. Quisumbing Chapter 51 Household Formation and Marriage Markets in Rural Areas, (Jan 2007): 3187–3247.https://doi.org/10.1016/S1573-4471(07)04051-XNorbert R. Schady Convexity and Sheepskin Effects in the Human Capital Earnings Function: Recent Evidence for Filipino Men, Oxford Bulletin of Economics and Statistics 65, no.22 (May 2003): 171–196.https://doi.org/10.1111/1468-0084.00042Chris A Spohr Formal schooling and workforce participation in a rapidly developing economy: evidence from “compulsory” junior high school in Taiwan, Journal of Development Economics 70, no.22 (Apr 2003): 291–327.https://doi.org/10.1016/S0304-3878(02)00099-8Sven E. Wilson The health capital of families: an investigation of the inter-spousal correlation in health status, Social Science & Medicine 55, no.77 (Oct 2002): 1157–1172.https://doi.org/10.1016/S0277-9536(01)00253-2T Paul Schultz Why Governments Should Invest More to Educate Girls, World Development 30, no.22 (Feb 2002): 207–225.https://doi.org/10.1016/S0305-750X(01)00107-3T. Paul Schultz Chapter 8 Women's roles in the agricultural household: Bargaining and human capital investments, (Jan 2001): 383–456.https://doi.org/10.1016/S1574-0072(01)10011-3KAKOLI BANERJEE Gender Stratification and the Contemporary Marriage Market in India, Journal of Family Issues 20, no.55 (Jun 2016): 648–676.https://doi.org/10.1177/019251399020005005Yana Van der Meulen Rodgers, Jane C Cooley Outstanding Female Economists in the Analysis and Practice of Development Economics, World Development 27, no.88 (Aug 1999): 1397–1411.https://doi.org/10.1016/S0305-750X(99)00063-7Jere R. Behrman Chapter 43 Labor markets in developing countries, (Jan 1999): 2859–2939.https://doi.org/10.1016/S1573-4463(99)30029-8Marcel Fafchamps, Agnes R. Quisumbing Human Capital, Productivity, and Labor Allocation in Rural Pakistan, SSRN Electronic Journal (Jan 1998).https://doi.org/10.2139/ssrn.68988

Nativity, Gender, and Earnings Discrimination

This research note reports the results of a study that estimated the cost of labor market discrimination faced by Puerto Ricans in the United States. The study extended the work ofprevious efforts in that it measured the cost of discrimination by nativity for males and females. The object was to determine the extent to which this cost varied by place of birth: which groups are more affected, island-born or U.S. -born Puerto Ricans? Males or females? A human capital earnings function, augmented with demographic and structural variables, was estimated for each nativity/gender group among Puerto Ricans and the results were compared to White wage earners, using the 1980 5% PUMSfile. A regression decomposition procedure was employed to isolate the cost of discrimination. The results indicated the following: Puerto Rican females are equally affected by discrimination, whether born in Puerto Rico or in the United States; the cost of discrimination is less for males, and men born in Puerto Rico are more affected than U.S.-born Puerto Rican males. The discussion demonstrates that discriminatory processes impact Puerto Ricans differently: the island-born are more susceptible, and so are females.

Empirical Age-Earnings Profiles

The "human capital earnings function," in which earnings are expressed as a quadratic in potential experience, is probably the most widely accepted empirical specification in economics. In spite of its widespread acceptance, the human capital earnings function provides a very poor approximation of the true empirical relationship between earnings and experience. The standard formulation understates early career earnings growth by about 30%-50% and overstates midcareer growth by 20%-50%. However, simple alternative specifications that fit the data are available.

Changes in earnings inequality and labour market segmentation: Metropolitan Santiago 1969–78

Changes in earnings inequality are examined in this article through an eclectic approach allowing for differences in human capital earnings function by labour market segments. Several findings are of interest. The first are the components of earnings inequality changes, these being, in order of importance: changes in the within segments inequality, changes in the relative share of the informal sector segment, and changes in relative income between segments. Second, these changes are found to be the result of labour market liberalisation policies such as abolition of both minimum wages and labour turnover legislation in the formal sector, the promotion of self‐employed activities in the informal sector, and, the selective mobility pattern between segments.

Sex differences in earnings: An analysis of Malaysian wage data

The conventional human capital earnings function is applied to a rich set of Malaysian wage data in an attempt to determine the origins of sex differences in average earnings. Several findings are of interest, the first being that the relationships estimated from the earnings function are similar to those typically reported for non‐LDCs. Second, less than a third of the average monthly wage difference between the sexes of about 34 per cent appears to be the consequence of either females having lower (measured) productivity than males, or females receiving lower rates of return to human capital than males. The major part of the earnings difference is apparently a consequence of employment distributions: females are much more likely to be in the low‐paying occupations.

Labor force experience and earnings: Women with children

Married women with children are observed to earn less than men, and less also than women without children. Differences in the hourly wage rates of individuals of the same age and with the same educational attainment may reflect, in part, differences in labor force experience. While interruption in the work experience of women is recognized as an important cause of lower current wage rates, less attention has been directed to the impact of child-related reductions in hours worked when women are in the labor force. This paper examines the impact of hours worked in all past periods on the current wage rate. Our model, in which the ‘intensity’ of an individual's work experience in any period can vary from 0 (no work) to 100% (full-time work), is contrasted with the standard human capital earnings function, in which intensity is assumed to be 100% in every period subsequent to the completion of school. Using a new data set, both models are estimated for a sample of working mothers. Contrasting the wages of the women in this sample with the wages of their husbands, we find that differences in the intensity of prior work experience account for approximately half of the observed sex-related wage gap.

EDUCATION AND DIFFERENCES IN POSTSCHOOL HUMAN INVESTMENT: COMMENT

Economic InquiryVolume 17, Issue 2 p. 310-314 EDUCATION AND DIFFERENCES IN POSTSCHOOL HUMAN INVESTMENT: COMMENT BARRY T. HIRSCH, BARRY T. HIRSCH *Assistant Professor, Departmentof Economics, University of North Carolina, Greensboro.Search for more papers by this author BARRY T. HIRSCH, BARRY T. HIRSCH *Assistant Professor, Departmentof Economics, University of North Carolina, Greensboro.Search for more papers by this author First published: April 1979 https://doi.org/10.1111/j.1465-7295.1979.tb00320.x AboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinkedInRedditWechat Volume17, Issue2April 1979Pages 310-314 RelatedInformation

Earnings, occupation, and human capital investment

In recent years the human capital earnings model has been widely used as a framework for examining the determination of earnings. A specification of the human capital earnings function developed by Chiswick and Mincer has been employed to examine earnings determination across individuals [Mincer, 1974b], states [Chiswick, 1974], metropolitan areas [Hirsch, 1978], occupations [Rahm, 1971], and over time [Chiswick-Mincer, 1972]. However, empirical studies utilizing the human capital framework have assumed that the effects of workexperience (postschool investment) on earnings are identical for individuals, regardless of occupation. This assumption runs counter to the current emphasis of many labor economists on the importance to lifetime earnings of gaining early access to certain occupational job ladders and of receiving firm specific on-the-job training [Doeringer and Piore, 1971 ; Thurow, 1975]. Likewise, human capital economists stress the importance of postschool training investments and at least recognize the fact that these investments vary across occupations. Indeed, Mincer has stated that [Mincer, 1974a, p. 33] : "an analysis in which these effects [of schooling and of experience] are allowed to differ [across occupations] would be desirable for a number of purposes, not the least of which is an insight into differential post-school job skill investments." This paper examines whether schooling, experience, and weeks worked have different effects on individual earnings in nine separate occupational categories. The Chiswick-Mincer spec*University of North Carolina at Greensboro. The research is drawn in part from my doctoral dissertation on which William R. Johnson and Roger Sherman provided helpful comments. Support by a doctoral dissertation grant from the U.S. Department of Labor, Employment and Training Administration, is gratefully acknowledged. ification of the human capital earnings function is modified in order to focus on differences across occupations in their earnings-experience profiles. This makes possible several inferences regarding the intensity, length, and rate of return to postschool human investments across occupational job ladders. In addition, we examine the manner in which occupation interacts with schooling in the earnings generation process and discuss analytical problems which arise in modeling this process. Finally, the relationship between wage rates, weeks worked, and occupation is examined. The Theoretical Framework