NOTE_Lecture_19A_-_labor_market_issues - 10/1/2009 Labor...

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10/1/2009 1 Labor Market Issues Objectives Investments in human capital Human capital theory: Education & earnings, rate of return to education Screening/signaling Human capital theory Economic discrimination Human capital theory Investment in human capital refers to investments that improve the productivity of labor. For example: – Formal education – Workshops/seminars – Training programs The higher productivity, in turn, results in higher income and/or wages
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10/1/2009 2 Earnings (+) Costs (-) Age 18 22 65 Direct costs of college Income earned w/ college degree Income earned w/ HS diploma Male Female High school $21,184 $11,914 AA $41,807 $26,295 BA/BS $54,403 $35,094 MA/MS $67,425 $46,250 PhD $90,511 $61,091 Source: Screening/signaling theory An alternative view of the higher ed=higher wages is that education serves as a screening or signaling device to employers; that is, applicant is “trainable”
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This note was uploaded on 05/22/2011 for the course ECON 1B taught by Professor Jamie during the Spring '06 term at West Valley.

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NOTE_Lecture_19A_-_labor_market_issues - 10/1/2009 Labor...

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