Sector-Specific Human Capital and the Distribution of Earnings
This 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.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- A. D. Roy, 1951. "Some Thoughts On The Distribution Of Earnings," Oxford Economic Papers, Oxford University Press, vol. 3(2), pages 135-146.
- Katz, Lawrence F. & Autor, David H., 1999. "Changes in the wage structure and earnings inequality," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 26, pages 1463-1555 Elsevier.
- Gueorgui Kambourov & Iourii Manovskii, 2009.
"Occupational Mobility and Wage Inequality,"
Review of Economic Studies,
Oxford University Press, vol. 76(2), pages 731-759.
- Claudia Goldin & Lawrence F. Katz, 1999. "The Returns to Skill in the United States across the Twentieth Century," NBER Working Papers 7126, National Bureau of Economic Research, Inc.
- Claudia Goldin & Robert A. Margo, 1991.
"The Great Compression: The Wage Structure in the United States at Mid- Century,"
NBER Working Papers
3817, National Bureau of Economic Research, Inc.
- Claudia Goldin & Robert A. Margo, 1992. "The Great Compression: The Wage Structure in the United States at Mid-Century," The Quarterly Journal of Economics, Oxford University Press, vol. 107(1), pages 1-34.
- Konstantinos Eleftheriou, 2008. "Matching, Specialties and Wage Inequality," Economics Bulletin, AccessEcon, vol. 10(11), pages 1-12.
- David Card & John E. DiNardo, 2002.
"Skill-Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles,"
Journal of Labor Economics,
University of Chicago Press, vol. 20(4), pages 733-783, October.
- David Card & John E. DiNardo, 2002. "Skill Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles," NBER Working Papers 8769, National Bureau of Economic Research, Inc.
- Heckman, James J & Sedlacek, Guilherme, 1985. "Heterogeneity, Aggregation, and Market Wage Functions: An Empirical Model of Self-selection in the Labor Market," Journal of Political Economy, University of Chicago Press, vol. 93(6), pages 1077-1125, December.
- repec:ebl:ecbull:v:10:y:2008:i:11:p:1-12 is not listed on IDEAS
- Huw Lloyd-Ellis, 1999. "Endogenous Technological Change and Wage Inequality," American Economic Review, American Economic Association, vol. 89(1), pages 47-77, March.
- Stephen Machin & John Van Reenen, 2007.
"Changes in wage inequality,"
LSE Research Online Documents on Economics
4667, London School of Economics and Political Science, LSE Library.
- Van Reenen, John, 1994.
"The Creation and Capture of Rents: Wages and Innovation in a Panel of UK Companies,"
CEPR Discussion Papers
1071, C.E.P.R. Discussion Papers.
- John Van Reenen, 1996. "The Creation and Capture of Rents: Wages and Innovation in a Panel of U. K. Companies," The Quarterly Journal of Economics, Oxford University Press, vol. 111(1), pages 195-226.
When requesting a correction, please mention this item's handle: RePEc:ucp:jhucap:v:4:y:2010:i:1:p:35-61. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Journals Division)
If references are entirely missing, you can add them using this form.