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Age, Education and Occupational Earnings Inequality

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  • Edward N. Wolff
  • Dennis M. Bushe

Abstract

In this paper, we will investigate the effect of six factors on occupational earnings inequality across all occupations in our sample and across occupations in five major Census subgroups. Those six factors are: differences in tasks, different levels of efficiency, institutional factors, time worked, the demand for labor and discrimination. Age and schooling will receive primary attention in our work and it will be shown that they are important determinants of earnings inequality among professional and clerical occupations but not among skilled, semi-skilled or unskilled occupations. Ability is also hypothesized as an important factor, but no measure of ability is provided in our sample. Differences in time worked and labor demand conditions, as measured by industrial and urban-rural mix, will also be analyzed, and their effect on earnings inequality is strong in most of the occupational subsamples. Differences in the race and sex composition of occupations do not appear to be significant factors in occupational earnings inequality, and the explanation offered is that discrimination takes the form of occupational segregation rather than differences in pay for similar work. In the conclusion a sketch of a "structural" theory of income distribution is proposed to account for our results.

Suggested Citation

  • Edward N. Wolff & Dennis M. Bushe, 1976. "Age, Education and Occupational Earnings Inequality," NBER Working Papers 0149, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:0149
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    References listed on IDEAS

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    1. Arthur J. Alexander, 1974. "Income, Experience, and the Structure of Internal Labor Markets," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 88(1), pages 63-85.
    2. Wolff, Edward N., 1975. "Social Determinants of Occupational Wage Behavior," Working Papers 75-27, C.V. Starr Center for Applied Economics, New York University.
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    5. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1.
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    7. Jacob Mincer, 1962. "On-the-Job Training: Costs, Returns, and Some Implications," NBER Chapters, in: Investment in Human Beings, pages 50-79, National Bureau of Economic Research, Inc.
    8. Link, Charles R, 1973. "The Quantity and Quality of Education and Their Influence on Earnings: The Case of Chemical Engineers," The Review of Economics and Statistics, MIT Press, vol. 55(2), pages 241-247, May.
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    10. Welch, Finis, 1973. "Black-White Differences in Returns to Schooling," American Economic Review, American Economic Association, vol. 63(5), pages 893-907, December.
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    13. Jacob A. Mincer, 1974. "Schooling and Earnings," NBER Chapters, in: Schooling, Experience, and Earnings, pages 41-63, National Bureau of Economic Research, Inc.
    14. Hanushek, Eric A, 1973. "Regional Differences in the Structure of Earnings," The Review of Economics and Statistics, MIT Press, vol. 55(2), pages 204-213, May.
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    Cited by:

    1. Edward N. Wolff & Joel Hay, 1977. "Educational Screening and Occupational Earnings," NBER Working Papers 0174, National Bureau of Economic Research, Inc.

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