How does the human capital perspective explain the differential earnings of women and men in the labor market? What are the strengths and weaknesses of this perspective?

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02-08-2022
Medicine

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How does the human capital perspective explain the differential earnings of women and men in the labor market? What are the strengths and weaknesses of this perspective?

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tripatsingh039 tripatsingh039 · Answer 1 · 2022-08-15T02:09:32-04:00

The human capital model suggests that wage structure plays a significant part in explaining the gender wage difference. In the event that, as suggested by the human capital model, workers of either sex earn stronger returns to experience, the pay gap between men and women will be greater.

Human capital theory's ability to assist researchers and policymakers in analyzing the connections between education and training as inputs and economic and social benefits as outputs is one of its key strengths. Due to methodological flaws including the use of a single theoretical lens, closed system modeling, inappropriate use of mathematical tools, and multi-variate analysis of interdependent variables, the human capital theory fails the test of realism.

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