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Can The Human Capital Approach Explain Life‐Cycle Wage Differentials Between Races And Sexes?

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  • HUOYING WU

Abstract

Using data from the National Longitudinal Survey of Youth–1979 cohort (NLSY79), this paper shows the importance of postschool human capital investment in describing both gender and racial wage gaps. The empirical results suggest that male‐female wage gaps, regardless of race, are mainly caused by gender differences in the human capital production process; generally, men gain more work experience and therefore have lower marginal costs of human capital production. Black‐white lifetime wage differentials could partly result from higher implicit interest rates for blacks, while the deterioration of black males’ relative economic status as they age can be attributed to higher depreciation rates of their human capital stock. (JEL J24, J30, C61)

Suggested Citation

  • Huoying Wu, 2007. "Can The Human Capital Approach Explain Life‐Cycle Wage Differentials Between Races And Sexes?," Economic Inquiry, Western Economic Association International, vol. 45(1), pages 24-39, January.
    • Handle: RePEc:bla:ecinqu:v:45:y:2007:i:1:p:24-39
    DOI: 10.1111/j.1465-7295.2006.00002.x
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    3. Kamal, Mustafa & Blacklow, Paul, 2021. "Australian age, period, cohort effects in the gender wage gap - 2001 to 2018," Working Papers 2021-02, University of Tasmania, Tasmanian School of Business and Economics.
    4. Christopher Rauh & Aranu Valladares-Esteban, 2023. "On the black-white gaps in labor supply and earnings over the lifecycle in the US," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 51, pages 424-449, December.
    5. Christopher Rauh & Aranu Valladares-Esteban, 2023. "On the black-white gaps in labor supply and earnings over the lifecycle in the US," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 51, pages 424-449, December.

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    More about this item

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis

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