Sector-Specific Human Capital and the Distribution of Earnings
AbstractThis paper demonstrates the way in which assignment frictions-the limited ability of workers to find jobs in which they have a comparative advantage-affect the level and composition of human capital acquisition as well as the distribution of income. As workers become more likely to find their preferred job, they specialize more. Specialization raises expected income. It also exposes workers to a greater downside loss when the more desired employment opportunities are unavailable. More specialization thereby raises the earnings divide between those who match well and those who do not, which under some conditions leads to greater inequality. (c) 2010 by The University of Chicago. All rights reserved..
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Bibliographic InfoArticle provided by University of Chicago Press in its journal Journal of Human Capital.
Volume (Year): 4 (2010)
Issue (Month): 1 ()
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Other versions of this item:
- Eric Smith, 2009. "Sector-specific human capital and the distribution of earnings," Working Paper 2009-21, Federal Reserve Bank of Atlanta.
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