unobserved skill

Doug Henwood dhenwood at
Fri Oct 16 08:02:54 PDT 1998

Andrew Kliman wrote:

>(3) EVEN WITHOUT the "unobserved skill" dodge, the work that
>tries to attribute wage differentials to HC or skill
>differences -- in other words, HC empirical work as a whole -- is
>COMPLETELY BOGUS, PURE CRAP. The basic reason is that it is
>impossible to divide wage differentials into a portion due to
>skill differentials, a portion due to discrimination, etc.
>For instance, one's years of schooling is supposedly a key HC
>variable, one that reflects the person's level of "skill."

Bowles & Gintis argue that it's very difficult to explain the education wage premium on the basis of things people learn in school. Instead, educated people earn more in large part because employers think if you could stick it out through school, you're likely to be a more docile employee and make more money for the boss. Of course this is an entirely separate question from the effects of racism and sexism on hiring and pay.


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