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Where Are We Now With Human Capital Theory in Australia? *
Author(s) -
PRESTON ALISON
Publication year - 1997
Publication title -
economic record
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.365
H-Index - 42
eISSN - 1475-4932
pISSN - 0013-0249
DOI - 10.1111/j.1475-4932.1997.tb00979.x
Subject(s) - human capital , human capital theory , earnings , wage , economics , labour economics , capital (architecture) , market economy , finance , archaeology , history
The dominant economic paradigm for the study of wage determination is the human capital model. Increasingly, however, there is growing discontent with this model. The catalyst is the empirical literature on important earnings relationships which cannot be explained by competitive wage theory. Is human capital theory redundant? How useful is the model in the 1990s? This paper provides an assessment of the current status of human capital theory in Australia. The analysis demonstrates that even in a non‐competitive environment such as Australia the human capital framework is extremely useful for the study of wage determination. Its weakness is its inability to explain significant and persistent interindustry, inter‐occupational and gender wage differences.