The Notion of Human Capital - Essay Example

Chapter 6 At the start of this chapter, we are presented with a definition of the human capital. The model shown provides the major supplier an explanation of gender differentials in economic outcomes. There is fieldwork done by Nobel laureates Theodore, Gary Becker and Jacob Mincer that displays individuals and their families making similar decisions regarding human capital investments. An example that was provided of human capital are the investments made in formal education, job searching and training, and geographic migration. Although the similarities between physical and human capital are intriguing, there is still one vital dissimilarity: the absence of government intervention, as it is generally more difficult to borrow to finance human capital investments than to finance physical investments. There are no big dissimilarities of gender in educational attainment in the United States of America, but there are some distinctions and remarkable changes throughout time. As Table 6-1 on page 153 shows figures on the educational attainment of the population between the ages of 25 to 64 in 1970 and 2007, showing the rising educational attainment of both men and women in terms of a falling share of the population that did not graduate from high school. In both 1970 and 2007, a larger amount of men than women were high school dropouts. Evidence indicates that the GED certificate is worth less than a high school diploma in the labor market. This same table shows a noticeable increase in college education for both men and women. Men were significantly more likely than women to get a college education, if not a higher degree. Yet female college attendance had increased at an alarming rate as compared to male college attendance for quite some time. The pace picked up in the late 1960s, though in the 1980s, women caught up to men and young women are now considerably more likely to graduate college than young men. In later times, the population of women who had completed a college education or higher was only slightly larger than the proportion of men. According to table 6-2, the variety of groups are in terms of gender and race. It reveals that Blacks and Hispanics have lower educational attainment than non-Hispanic whites, and were less likely to complete high school, making it less likely that they will graduate from college. The differences between Blacks and non-Hispanic whites were noticeably smaller than the differences between Hispanic and non-Hispanic whites. This reveals a significant rise in the educational attainment of the black population since the 1960s. Socialization is defined as the process by which the influence of family, teachers and the media shapes an individual’s attitudes and behavior. The process of socialization impacts the self-esteem of men and women, proving that it could possibly affect boys’ and girls’ perceptions of their mathematical abilities or the appropriateness of their interest in this subject. Furthermore, this process helps to shape the role that boys and girls are expected when it comes to working. In recent generations, boys and girls have been taught from a very young age to aspire to and train for gender-appropriate lines of work. Many of them pass up wonderful opportunities because they go against what it expected of them in regard to their gender. Suddenly, they are met with limitations and boundaries to what they can achieve. Chapter 7 The first thing noted within this chapter is the definition of labor market discrimination, which exists when two equally qualified individuals are treated differently solely based on their gender. Men are often regarded in a higher light than women, and this can often lead to differences in salary or treatment. Labor market discrimination is expected to unfavorably affect the economic status of women directly by producing differences in their productivity-related characteristics or qualifications. Men and women in the absence of discrimination would be equally productive and would receive the same pay; those who are subjected to discrimination do not receive equal rewards. Furthermore, labor market discrimination directly lowers women’s productivity as well as their pay, as for instance, when a woman is denied access to an employer-sponsored training program or when customers are reluctant to patronize a female salesperson. Women are treated entirely different as compared to men when discrimination is taking place in the workplace. The theoretical and empirical work on labor market discrimination has focused on more willingly measured direct effects on pay or occupational differences between equally well-qualified men and women in the same field, in the same position. The full impact of discrimination also includes any feedback effects on women’s behavior that result in their being less qualified than men. Economics and other social scientists have intently studied the sources of the earnings gap between men and women. Estimates vary depending on the data used and the types of qualifications that were studied. Nevertheless, virtually all of the studies conducted found that there was a noticeable portion of the pay gap that was unable to be explained by gender differences in qualifications. One of the methods of decomposing gender differences in earning was to use statistical methods, which decomposes the gender wage gap into two parts. One of the parts was due to noticeable differences in human capital, which was able to be explained is called the explained gap and the other part that was unable to be explained by these factors was called the unexplained gap. The Blau-Kahn analysis is based on data from the Panel Study of Income Dynamics (PSID), which contains information on actual labor market experience for a large nationally representative sample. The data used are for full-time workers aged from 18 to 65 in 1999, also including an equal representation of both genders. Some of the unexplained gap could be explained by the impact of childbearing. There is a study that suggests a negative effect on children on women’s wages that is not simply due to the interruptions associated with childbearing. This could reflect the fact that women often severed their ties to their employer and withdrew from the labor force entirely after the birth of a child. They would then give up the returns to any firm-specific training they had acquired. Childbirth was wrongly associated with women not wanting to return to work; many women have no choice but to stay at home with their infant children during their first few months. Read More