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Predicting Earnings Distributions across Cities: The Human Capital Model vs the National Distribution Hypothesis

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  • Barry T. Hirsch

Abstract

Microdata are used to examine the relative ability of the human capital model and of an alternative national distribution hypothesis to generate predicted distributions of earnings that are close to actual distributions within 48 SMSAs. Surprisingly, the national distribution hypothesis is found to be relatively more robust in predicting earnings distributions than the fixed-parameter human capital model. Earnings functions are then estimated separately within each SMSA, and it is found that the parameters of the human capital model vary significantly across labor markets. Further analysis examines the relationship between earnings distributions, the estimated parameters of the model, city size, and region.

Suggested Citation

  • Barry T. Hirsch, 1978. "Predicting Earnings Distributions across Cities: The Human Capital Model vs the National Distribution Hypothesis," Journal of Human Resources, University of Wisconsin Press, vol. 13(3), pages 366-384.
    • Handle: RePEc:uwp:jhriss:v:13:y:1978:i:3:p:366-384
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    Cited by:

    1. Enchautegui, Maria E, 1997. "Welfare Payments and Other Economic Determinants of Female Migration," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages 529-554, July.
    2. John Odland & Mark Ellis, 1998. "Variations in the Labour Force Experience of Women Across Large Metropolitan Areas in the United States," Regional Studies, Taylor & Francis Journals, vol. 32(4), pages 333-347.
    3. Lewis A. Soroka, 1984. "City Size and Income Distributions: The Canadian Experience," Urban Studies, Urban Studies Journal Limited, vol. 21(4), pages 359-366, November.
    4. Gunther Maier & Peter Weiss, 1986. "The Importance of Regional Factors in the Determination of Earnings: The Case of Austria," International Regional Science Review, , vol. 10(3), pages 211-220, December.
    5. Paul E. Gabriel & Susanne Schmitz, 1995. "Favorable Self-Selection and the Internal Migration of Young White Males in the United States," Journal of Human Resources, University of Wisconsin Press, vol. 30(3), pages 460-471.

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