Micro Foundations of Earnings Differences

Arbeitspapier

This paper examines how human capital based approaches explain the distribution of earnings. It assesses traditional, quasi-experimental, and new micro-based structural models, the latter of which gets at population heterogeneity by estimating individual-specific earnings function parameters. The paper finds one's ability to learn and one's ability to retain knowledge are most influential in explaining earnings variations. Marketable skills actually acquired in school depend on these two types of ability. However, schools may also implement ability enhancing interventions which can play a role in improving learning outcomes. Policy initiatives that improve these abilities would be a possible strategy to increase earnings and lower earnings disparity.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 10922

Classification and Topics

• Classification: Wirtschaft
• Subject: earnings distribution ; human capital ; heterogeneity ; ability

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Das, Tirthatanmoy ; Polachek, Solomon
• Event: Veröffentlichung
• (who): Institute of Labor Economics (IZA)
• (where): Bonn
• (when): 2017

Further information

• Handle: http://hdl.handle.net/10419/170906
• Last update: 10.03.2025, 11:41 AM CET