The Production of Human Capital and the Lifecycle of Earnings: Variations on a Theme

44 Pages Posted: 27 Jul 2000 Last revised: 22 Sep 2010

See all articles by Jacob Mincer

Jacob Mincer

Columbia University, Graduate School of Arts and Sciences, Department of Economics; National Bureau of Economic Research (NBER)

Date Written: August 1994

Abstract

After a brief summary of Ben Porath's 1967 model approach, I enquire into the empirical validity and some implications of his insights. Section 2 is an attempt to answer the question: Are the shapes and magnitudes of growth in wage profiles largely attributable to human capital investments? Section 3 tests the proposition that over the working age capacity wages (i.e. wages before netting out investment) decline before observed wages do. Implied timing of labor supply provides the test. The findings shed light on developments in the U.S. labor market in the past several decades. In section 4 some implications are drawn from Ben Porath's model for interpersonal differences and historical changes in life-cycle human capital investments. The positive correlation between schooling and training, predicted by the model is found in cross-sections. It also shows up in parallel movements in schooling and training in the 1980's as the demand for human capital increased. Once again, observed U.S. patterns are highlighted.

Suggested Citation

Mincer, Jacob, The Production of Human Capital and the Lifecycle of Earnings: Variations on a Theme (August 1994). NBER Working Paper No. w4838. Available at SSRN: https://ssrn.com/abstract=233691

Jacob Mincer (Contact Author)

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