Electronic Resource
Oxford, UK and Boston, USA
:
Blackwell Publishers Ltd
Bulletin of economic research
52 (2000), S. 0
ISSN:
1467-8586
Source:
Blackwell Publishing Journal Backfiles 1879-2005
Topics:
Economics
Notes:
Human capital theory provides the generally accepted interpretation of the relationship between earnings and labour market experience, namely that general human capital tends to increase with experience. However, there are other plausible interpretations. Search models, for example, generally predict that more time in the labour market increases the chance of finding a better match and hence tends to be associated with higher earnings. This paper shows how a simple search model can be used to predict the amount of earnings growth that can be assigned to search with the residual being assigned to the human capital model. A substantial if not the larger part of the rise in earnings over the life-cycle in Britain can be explained by a simple search model, and virtually all the earnings gap between men and women can be explained in this way. Overall, the evidence suggests that we do need to reinterpret the returns to experience in earnings functions.
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1111/1467-8586.00109
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