The authors estimate labor dem and equations derived from a (restricted variable) cost function in which "experience" on a technology (proxied by the mean age of the capital stock) enters "non-neutrally." The specification of the underlying cost function isbased on the hypothesis that highly educated workers have a comparative advantage with re spect to the adjustment to, and implementation of, new technologies. The empiric al results are consistent with the implication of this hypothesis, that the rel ative demand for educated workers declines as the ages of plant and (particularl y) of equipment increase, especially in R&D-intensive industries.
n.a.
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 schoolingearnings function by Becker and Chiswick (1966). Mincer (1974) 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 functions are presented.
Against a general trend over the last 25 years of increasing wage differentials between college and high school graduates, two departures are noteworthy. Between 1971 and 1979, the college wage premium fell by about a third for young graduates and somewhat less for older workers. To some, this narrowing wage differential marked the end of an era when investments in college yielded returns comparable to other investments. In retrospect, the decline in the 1970s was a temporary phenomenon caused by a rapid increase in numbers of college graduates and the baby boom cohorts' entry into the job market. Then, between 1979 and 1986, the college wage premium rose very sharply, exceeding anything found in earlier data. After documenting changes in the college wage premium between 1963 and 1986, we explore dimensions of the recent increase by age, race, and sex, as well as the wage differentials between high school dropouts and graduates and between college dropouts and graduates. Although alternative explanations of earlier departures from the general trend can be found, the sole explanation for the recent dramatic rise in the premium is that the demand for college-trained workers has increased hugely.
The arrival of the post--World War II baby boom cohorts in the job market raises many questions of effects associated with a rapidly declining average age of the labor force. This paper first summarizes 1967-75 wage behavior, showing that relative wages between schooling groups have not changed for prime-aged workers, but there is some evidence, for new job-market entrants, that wages of more educated workers have fallen relative to wages of less educated workers. However, changes among schooling groups are small in comparison to those between new entrants and peak earners within schooling group. The evidence is very direct: as work-experience distributions shifted toward increased proportions of young workers, their relative wages fell. After examining a career-phase model in which workers at different phases are imperfect substitutes, estimates of empirical relationships between cohort size and wages are presented. The main result is that income-depressant effects of (own) cohort size decline over the career but do not vanish altogether. Initial effects include reductions in wage rates and in hours and weeks worked, while persistent effects extend only to wages.
© 2004 European Expert Network on Economics of Education This e-mail address is protected against spambots. Please activate JavaScript in order to see them. | Home | Site Map | Contacts | Impressum | Printversion
