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Does Salaried Status Affect Human Capital Accumulation?

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  • Sheldon E. Haber
  • Robert S. Goldfarb

Abstract

Human capital studies do not usually consider whether an individual is paid an hourly wage or a salary. The authors of this paper develop a conceptual framework that explains why some workers are paid salaries and predicts that salaried workers will invest more in human capital than will hourly workers. In particular, this prediction hinges on the differing effort incentives facing hourly and salaried workers, and their employers, in jobs that are paced versus unpaced. Empirical evidence supporting this prediction and other hypotheses implied by the proposed framework is presented using data on individuals covering a 16-month period in 1984–85 from the Bureau of Census Survey of Income and Program Participation (SIPP), a longitudinal survey.

Suggested Citation

  • Sheldon E. Haber & Robert S. Goldfarb, 1995. "Does Salaried Status Affect Human Capital Accumulation?," ILR Review, Cornell University, ILR School, vol. 48(2), pages 322-337, January.
    • Handle: RePEc:sae:ilrrev:v:48:y:1995:i:2:p:322-337
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    Cited by:

    1. Daniel S. Hamermesh, 2002. "12 Million Salaried Workers are Missing," ILR Review, Cornell University, ILR School, vol. 55(4), pages 649-666, July.
    2. Sanford E. Devoe & Byron Y. Lee & Jeffrey Pfeffer, 2010. "Hourly versus Salaried Payment and Decisions about Trading Time and Money over Time," ILR Review, Cornell University, ILR School, vol. 63(4), pages 627-640, July.

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