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Mincer's Overtaking Point and the Lifecycle Earnings Distribution

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Author Info
Polachek, Solomon W. (State University of New York at Binghamton and IZA Bonn)

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Abstract

In 1958 Jacob Mincer pioneered an important approach to understand earnings distribution. In the years since Mincer’s seminal work, he as well as his students and colleagues extended the original human capital model, reaching important conclusions about a whole array of observations pertaining to human wellbeing. This line of research explained why education enhances earnings; why earnings rise at a diminishing rate throughout one’s life; why earnings growth is smaller for those anticipating intermittent labor force participation; why men earn more than women; why whites earn more than blacks; why occupational distributions differ by gender; why geographic and job mobility predominate among the young; why unemployment is lower among the skilled; and why numerous other labor market phenomena occur. This paper surveys the answers to these and other questions based on research emanating from Mincer’s original discovery. In addition, this paper provides new empirical evidence regarding Mincer’s concept of the "overtaking age" - a topic not currently well explored in the literature. In this latter vein, the paper shows that Mincer’s original finding of a U-shaped (log) variance of earnings over the life cycle is upheld in recent data, both for the U.S. as well as at least seven other countries.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 865.

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Length: 48 pages
Date of creation: Aug 2003
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Handle: RePEc:iza:izadps:dp865

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Related research
Keywords: human capital; earnings; overtaking age; wellbeing; Mincer;

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Find related papers by JEL classification:
B20 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - General
B31 - Schools of Economic Thought and Methodology - - History of Thought: Individuals - - - Individuals
D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
J6 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies
J7 - Labor and Demographic Economics - - Labor Discrimination

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