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Title: Wages, Human Capital, and the Allocation of Labor across Sectors

Citation Type: Miscellaneous

Publication Year: 2014

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Abstract: We document for nine countries ranging from rich (Canada, U.S.) to poor (India, Indonesia) that average wages are higher in non agriculture than in agriculture. We measure sectoral human capital and find that it accounts for the entire wage gap in the U.S. and most of the wage gaps elsewhere. We develop a multi sector model that explains these findings if: (i) Mincer returns to schooling are equal in both sectors; (ii) more able workers sort into non agriculture; (iii) distortions to the allocation of labor between sectors are negligible in the U.S. and small elsewhere.

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Authors: Schoellman, Todd; Herrendorf, Berthold

Publisher: Arizona State University

Data Collections: IPUMS USA, IPUMS CPS

Topics: Labor Force and Occupational Structure

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