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Human capital accumulation of salaried and self-employed workers

  • Kawaguchi, Daiji

Both human capital accumulation and Lazear contracts can explain the rais- ing wage of salary/wage worker through job experience or tenure. To distin- guish between these two effects, Lazear and Moore (1984) used self-employed workers' wage growth to partial out the effect of human capital accumulation from salary/wage workers' wage growth. When the human capital accumu- lation behavior is identical across two kinds of jobs, the difference in wage growth between salary/wage workers and self-employed workers are due to Lazear contract since self-employed workers' wage are determined by their productivity. However, in the model developed in this paper, when self- employed workers face more wage variation but enjoy a higher return for human capital, human capital accumulation for those two kinds of jobs are shown to be different.

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Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 10 (2003)
Issue (Month): 1 (February)
Pages: 55-71

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Handle: RePEc:eee:labeco:v:10:y:2003:i:1:p:55-71
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