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Alternative Models of Earnings Determination and Labor Market Structures

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  • Eric A. Hanushek

Abstract

There are three distinct research traditions in the analysis of individual earnings determination: human capital, or earnings function, analyses; aggregate wage analyses; and labor demand analyses. An important and incongruous aspect of each is the treatment of geographical differences in labor markets. This paper first investigates the magnitude and character of geographical wage differentials. The sizable differences discovered there are then related to the existing, and highly simplified, models of labor market differences. While the two major classes of models (compensating differentials and labor demand) differ significantly in assumptions and implications, it is impossible to distinguish adequately between them. There appears to be a clear need for more structural analyses of labor market operations.

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Bibliographic Info

Article provided by University of Wisconsin Press in its journal Journal of Human Resources.

Volume (Year): 16 (1981)
Issue (Month): 2 ()
Pages: 238-259

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Handle: RePEc:uwp:jhriss:v:16:y:1981:i:2:p:238-259

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Web page: http://jhr.uwpress.org/

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Cited by:
  1. John Odland & Mark Ellis, 1998. "Variations in the Labour Force Experience of Women Across Large Metropolitan Areas in the United States," Regional Studies, Taylor & Francis Journals, vol. 32(4), pages 333-347.
  2. Grubb, W. Norton, 2002. "Learning and earning in the middle, part II: state and local studies of pre-baccalaureate education," Economics of Education Review, Elsevier, vol. 21(5), pages 401-414, October.
  3. David C Ribar, 2000. "County-Level Estimates of the Employment Prospects of Low-Skill Workers," Working Papers 00-11, Center for Economic Studies, U.S. Census Bureau.

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