Open AccessSources of Earnings Differentials Among Migrants and Natives
Author(s) -
Ather Maqsood Ahmed
Publication year - 1998
Publication title -
pakistan development review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.154
H-Index - 26
ISSN - 0030-9729
DOI - 10.30541/v37i4iipp.939-953
Subject(s) - earnings , unobservable , economics , differential (mechanical device) , human capital , labour economics , endowment , human capital theory , injustice , demographic economics , psychology , market economy , political science , social psychology , accounting , law , engineering , econometrics , aerospace engineering
The theory of human capital postulates that earnings ofdifferent categories of workers, be they male or female, black or white,unionised or non-unionised depend on the level of human capitalendowment of these individuals [Becker (1964) and Mineer (1974)].Besides educational attainment and on-the-job experience, part of theearnings differential, at lest in the short run, can also result frommarket imperfections such as restrictions on factor mobility or otherartificial distortions. However, despite concerted efforts by public andsocial institutions to remove social injustice, the automatic .long runmarket clearance as envisaged by classical economists is not alwaysthere. It is not uncommon to find workers with identical background andskills receiving differentials treatment in terms of wages and otherrewards. This suggests that unobservable personal characteristics arealso positively valued at the market and that the market has a "taste"for discrimination.! The theory of discrimination thus hypothesises thatdifferential wages ,can exit if market differentiates and treatsdistinct categories of workers on the basis of race, gender or similarcategorisations [Becker (1957)].