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Alternative Models of Earnings Determination and Labor Market Structures

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  • Eric A. Hanushek

Abstract

There are three distinct research traditions in the analysis of individual earnings determination: human capital, or earnings function, analyses; aggregate wage analyses; and labor demand analyses. An important and incongruous aspect of each is the treatment of geographical differences in labor markets. This paper first investigates the magnitude and character of geographical wage differentials. The sizable differences discovered there are then related to the existing, and highly simplified, models of labor market differences. While the two major classes of models (compensating differentials and labor demand) differ significantly in assumptions and implications, it is impossible to distinguish adequately between them. There appears to be a clear need for more structural analyses of labor market operations.

Suggested Citation

  • Eric A. Hanushek, 1981. "Alternative Models of Earnings Determination and Labor Market Structures," Journal of Human Resources, University of Wisconsin Press, vol. 16(2), pages 238-259.
    • Handle: RePEc:uwp:jhriss:v:16:y:1981:i:2:p:238-259
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    Citations

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    Cited by:

    1. Tolbert, Charles M., II & Killian, Molly Sizer, 1987. "Labor Market Areas for the United States," Staff Reports 277959, United States Department of Agriculture, Economic Research Service.
    2. David C. Ribar, 2003. "County-Level Estimates Of The Employment Prospects Of Low-Skill Workers," Research in Labor Economics, in: Worker Well-Being and Public Policy, pages 227-268, Emerald Group Publishing Limited.
    3. 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.
    4. Jack E. Triplett, 1983. "Introduction: An Essay on Labor Cost," NBER Chapters, in: The Measurement of Labor Cost, pages 1-60, National Bureau of Economic Research, Inc.
    5. 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.
    6. Miriam Maeder, 2014. "State-level heterogeneity in returns to secondary schooling in West Germany," Working Papers 147, Bavarian Graduate Program in Economics (BGPE).
    7. 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.
    8. Irving Hoch, 1987. "City Size and US Urban Policy," Urban Studies, Urban Studies Journal Limited, vol. 24(6), pages 570-586, December.
    9. Naser Daneshvary & William L. Weber, 1991. "Sources Of Wage Differentials Between Native And Immigrant Workers: A Regional Analysis," The Review of Regional Studies, Southern Regional Science Association, vol. 21(2), pages 119-135, Summer.
    10. Grubb, W. Norton, 2002. "Learning and earning in the middle, part II: state and local studies of pre-baccalaureate education," Economics of Education Review, Elsevier, vol. 21(5), pages 401-414, October.

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