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Age, Education and Occupational Earnings Inequality

Listed author(s):
  • Edward N. Wolff
  • Dennis M. Bushe

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.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 0149.

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Date of creation: Sep 1976
Publication status: published as "Schooling & Occupational Earnings." Review of Income and Wealth, Vol. 23, No. 3, (September 1977), pp. 259-278.
Handle: RePEc:nbr:nberwo:0149
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  1. 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.
  2. Arthur J. Alexander, 1974. "Income, Experience, and the Structure of Internal Labor Markets," The Quarterly Journal of Economics, Oxford University Press, vol. 88(1), pages 63-85.
  3. Wolff, Edward N., 1975. "Social Determinants of Occupational Wage Behavior," Working Papers 75-27, C.V. Starr Center for Applied Economics, New York University.
  4. Hansen, W Lee & Weisbrod, Burton A & Scanlon, William J, 1970. "Schooling and Earnings of Low Achievers," American Economic Review, American Economic Association, vol. 60(3), pages 409-418, June.
  5. 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.
  6. Farbman, Michael, 1973. "Income Concentration in the Southern United States," The Review of Economics and Statistics, MIT Press, vol. 55(3), pages 333-340, August.
  7. Hause, John C, 1972. "Earnings Profile: Ability and Schooling," Journal of Political Economy, University of Chicago Press, vol. 80(3), pages 108-138, Part II, .
  8. Ruggles, Richard, 1970. "Income Distribution Theory," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 16(3), pages 211-219, September.
  9. Johnson, George E & Stafford, Frank P, 1974. "Lifetime Earnings in a Professional Labor Market: Academic Economists," Journal of Political Economy, University of Chicago Press, vol. 82(3), pages 549-569, May/June.
  10. Klevmarken, N Anders & Quigley, John M, 1976. "Age, Experience, Earnings, and Investments in Human Capital," Journal of Political Economy, University of Chicago Press, vol. 84(1), pages 47-72, February.
  11. Welch, Finis, 1973. "Black-White Differences in Returns to Schooling," American Economic Review, American Economic Association, vol. 63(5), pages 893-907, December.
  12. Katz, David A, 1973. "Faculty Salaries, Promotion, and Productivity at a Large University," American Economic Review, American Economic Association, vol. 63(3), pages 469-477, June.
  13. Yoram Barzel, 1973. "The Determination of Daily Hours and Wages," The Quarterly Journal of Economics, Oxford University Press, vol. 87(2), pages 220-238.
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