Human Capital Accumulation, Education and Earnings Inequality

No 310, IZA Discussion Papers from Institute of Labor Economics (IZA)

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.

Keywords: human capital formation; educatio n system; Inequality; ability biased technological change (search for similar items in EconPapers)
JEL-codes: E20 J30 J31 O30 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2001-06
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published - substantially revised version published as 'Human Capital Formation, Education and Earnings Inequality' in: Applied Economics Quarterly, 2008, 54(1), 7 - 26

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