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Human Capital Accumulation, Education and Earnings Inequality

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  • Sunde, Uwe

    () (University of Munich)

Abstract

This paper attempts to add to the understanding of the causes for the differing recent developments in inequality in OECD countries. The similarity of shocks and technological changes affecting these countries suggests that interactions of these shocks and country-specific institutions are responsible for the diverging inequality patterns. The paper suggests a channel complementary to those investigated in recent contributions, focusing on the impact of education. A microfoundation of human capital formation is proposed, emphasizing heterogeneity of individuals and multidimensionality of human capital. The reactions in individual behavior triggered by technological change are crucially affected by the education system and are shown to be responsible for the divergent developments in inequality.

Suggested Citation

  • Sunde, Uwe, 2001. "Human Capital Accumulation, Education and Earnings Inequality," IZA Discussion Papers 310, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp310
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    References listed on IDEAS

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    Cited by:

    1. Maurizio Iacopetta, 2006. "Human Capital Dispersion and Incentives to Innovate," DEGIT Conference Papers c011_013, DEGIT, Dynamics, Economic Growth, and International Trade.

    More about this item

    Keywords

    human capital formation; educatio n system; Inequality; ability biased technological change;

    JEL classification:

    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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