EC120 Lecture Notes - Lecture 19: Human Capital, Market Power, Efficiency Wage
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EC120 Full Course Notes
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Document Summary
Is to understand the wide variation in earnings that we. The general framework of the theory of the labour market presented in ch. Determinants of supply and demand for different types of labour will be. A difference in wages that arises to offset the nonmonetary characteristics of examined more closely her. The accumulation of investments in people, such as education and on-the-job. Workers with more human capital on avg. earn more than those with less o. , earn about 60% more than workers who end their education with a high-school diploma. Difference in wages between highly educated workers and less educated workers may be considered as compensating differential for the cost of becoming educated. Natural ability and many other personal characteristics determine how productive workers are and therefore play a role in determining the wages they earn. Workers who work hard are more productive and earn higher wages. Change also plays a role in determining wages.
