The Human Capital ModelHuman CapitalInvestments in Human CapitalSocietal Discrimination Versus Labor Market DiscriminationEducational Attainment, 1999 (Ages 25-64)Slide 6Slide 7Slide 8Slide 9Higher Education (2007-2008) Percentage of Degrees Awarded to WomenPercentages of Bachelor’s Degrees Awarded to Women by Selected Fields (1996-1997)Experience-earnings profileexperience-earnings profileSlide 14Decision to attend collegeSlide 16Slide 17Slide 18Calculation of present valueImplications of the modelSlide 21Slide 22Slide 23Slide 24Implications for occupational choiceOther factors that affect career decisionsOther factors that affect career decisionsSlide 28Slide 29Factors affecting women’s increased educational attainmentTitle IXSlide 32On-the-job trainingSlide 34Who pays the costs of on-the-job general training?General trainingHow do expectations of discontinuous LF experience influence an individual’s investment in general training?Who pays the costs of firm-specific training?How do the worker & the firm share the costs & benefits of firm-specific training?Firm-specific trainingImplications of firm-specific trainingMore implications of firm-specific trainingSlide 43Human capital theory & occupationsHuman capital theory & earningsOther supply-side factorsSlide 47Slide 48Slide 49Slide 50Slide 51Evidence supporting human capital theorySlide 53Findings that are not explained by human capital theory“College Student Degree of Participation in the Labor Force: Determinants & Relationship to School Performance,” By Maria E. CanabalFindings of Canabal & other Researchers (cont’d):The Human Capital ModelHuman CapitalIndividuals possess knowledge and skills which affect their productivity. The knowledge and skills are their human capital.Investments in Human CapitalThere are many investments that individuals and firms make that represent investments in human capital. These include education and job training.Societal Discrimination Versus Labor Market Discrimination Societal discrimination (prelabor market discrimination) – societal influences that cause individuals to make decisions that adversely affect their status in the labor marketExample: Young women with an aptitude for math and science do not enter those fields because they are socialized to believe that those are men’s fields and women aren’t good at them.Labor market discrimination – treating two individuals with equal qualifications differently for reasons unrelated to their productivityExample: Employers do not hire or promote women in particular types of jobs. Labor market discrimination lowers women’s economic status directly when the employer refuses to hire or promote them. It can also lower their status indirectly by reducing their incentives to invest in themselves and to acquire particular job qualifications.Educational Attainment, 1999 (Ages 25-64) (%) Whites Blacks HispanicsMales Females Males Females Males FemalesLess than 4 yrs of h.s.13.0 11.6 18.4 17.5 41.9 40.44 yrs of h.s. only31.8 34.1 39.8 35.1 28.2 27.6Some college25.3 27.5 26.4 29.5 18.9 20.04+ yrs of college29.8 26.8 15.3 18.0 11.0 12.0Total 100.00 100.00 100.00 100.00 100.00 100.00Hispanics are much more likely than whites and blacks to drop out of high school.Educational Attainment, 1999 (Ages 25-64) (%) Whites Blacks HispanicsMales Females Males Females Males FemalesLess than 4 yrs of h.s.13.0 11.6 18.4 17.5 41.9 40.44 yrs of h.s. only31.8 34.1 39.8 35.1 28.2 27.6Some college25.3 27.5 26.4 29.5 18.9 20.04+ yrs of college29.8 26.8 15.3 18.0 11.0 12.0Total 100.00 100.00 100.00 100.00 100.00 100.00Blacks are more likely than whites and Hispanics to complete high school, but go no further.Educational Attainment, 1999 (Ages 25-64) (%) Whites Blacks HispanicsMales Females Males Females Males FemalesLess than 4 yrs of h.s.13.0 11.6 18.4 17.5 41.9 40.44 yrs of h.s. only31.8 34.1 39.8 35.1 28.2 27.6Some college25.3 27.5 26.4 29.5 18.9 20.04+ yrs of college29.8 26.8 15.3 18.0 11.0 12.0Total 100.00 100.00 100.00 100.00 100.00 100.00Whites are more likely to complete college than blacks and Hispanics.Educational Attainment, 1999 (Ages 25-64) (%) Whites Blacks HispanicsMales Females Males Females Males FemalesLess than 4 yrs of h.s.13.0 11.6 18.4 17.5 41.9 40.44 yrs of h.s. only31.8 34.1 39.8 35.1 28.2 27.6Some college25.3 27.5 26.4 29.5 18.9 20.04+ yrs of college29.8 26.8 15.3 18.0 11.0 12.0Total 100.00 100.00 100.00 100.00 100.00 100.00Black and Hispanic women are more likely to attend college and more likely to complete college than their male counterparts.Educational Attainment, 1999 (Ages 25-64) (%) Whites Blacks HispanicsMales Females Males Females Males FemalesLess than 4 yrs of h.s.13.0 11.6 18.4 17.5 41.9 40.44 yrs of h.s. only31.8 34.1 39.8 35.1 28.2 27.6Some college25.3 27.5 26.4 29.5 18.9 20.04+ yrs of college29.8 26.8 15.3 18.0 11.0 12.0Total 100.00 100.00 100.00 100.00 100.00 100.00White women are more likely to have dropped out of college than white men. (Among young people, however, there are more women than men who graduate from college.)Higher Education (2007-2008)Percentage of Degrees Awarded to WomenAssociate Bachelor’s Master’s DoctoratesFirst Professional*62.3 57.3 60.6 51.0 49.7*First professional degrees are those awarded in post-college professional training programs such as medicine, law, business, dentistry, pharmacy, veterinary medicine, and theology.Women receive more Associate’s, Bachelor’s, Master’s and Doctorates, but slightly fewer first professional degrees.http://nces.ed.gov/fastfacts/display.asp?id=72Percentages of Bachelor’s Degrees Awarded to Women by Selected Fields (1996-1997)Engineering 16.6Computer & Information Sciences 27.2Economics 30.9Architecture & Related Programs 35.9Bus. Mgt, Admin. Sciences, & Marketing 48.6Education 75.0Health 81.5Home Economics 88.4Women are much less likely than men to major in engineering, computer & information sciences, economics, and architecture.They are much more likely than men to major in education, health, and home economics.Experience-earnings profileindicates the annual earnings at each age or at each number of years of experienceexperience-earnings profileyears$The experience-earnings profile tends to rise quickly with the first few years of experience and then flatten out.experience-earnings profileThe experience-earnings profile tends to be flatter for the high school graduate than for the college graduate. This is because college graduates