TY  - RPRT
        AU  - Das, Tirthatanmoy
AU  - Polachek, Solomon
        TI  - Micro Foundations of Earnings Differences
        PY  - 2017/Jul/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 10922
        UR  - https://www.iza.org/publications/dp10922
        AB  - This paper examines how human capital based approaches explain the distribution of earnings. It assesses traditional, quasi-experimental, and new micro-based structural models, the latter of which gets at population heterogeneity by estimating individual-specific earnings function parameters. The paper finds one's ability to learn and one's ability to retain knowledge are most influential in explaining earnings variations. Marketable skills actually acquired in school depend on these two types of ability. However, schools may also implement ability enhancing interventions which can play a role in improving learning outcomes. Policy initiatives that improve these abilities would be a possible strategy to increase earnings and lower earnings disparity.
        KW  - heterogeneity
KW  - human capital
KW  - earnings distribution
KW  - ability
        ER  -