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Human Capital and the Business Cycle Effects on the Postgraduate Wage Premium

Gu, Ran (2022) 'Human Capital and the Business Cycle Effects on the Postgraduate Wage Premium.' Review of Economic Dynamics. ISSN 1094-2025

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Postgraduate degree holders experience lower cyclical variation in real wages than those with undergraduate degrees. Moreover, postgraduate jobs require more spe- cific human capital. Using an equilibrium search model with dynamic incentive contracts, this paper attributes the cyclicality of the postgraduate-undergraduate wage gap to the differences in specific capital. Greater specific capital leads to lower mobility, thereby improving risk-sharing between workers and firms. The estimates of the model reveal that specific capital can explain the differences both in labour turnover and in real wage cyclicality between education groups.

Item Type: Article
Uncontrolled Keywords: real wage cyclicality; education; wage premium; specific human capital; wage contract; search
Divisions: Faculty of Social Sciences
Faculty of Social Sciences > Economics, Department of
SWORD Depositor: Elements
Depositing User: Elements
Date Deposited: 11 Feb 2022 20:43
Last Modified: 15 Aug 2022 09:27

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