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Human Capital Theory

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Human Capital Theory
To what extent can Human Capital Theory provide a plausible explanation for inequalities in the labour market? Illustrate your answer with examples of labour-market segmentation tied to race or gender or social class.

Introduction:

Human capital theory can be identified as studies of organisations, individuals or nations which accumulates stock of productive skills and technical knowledge from study of investments (Becker, 1964).By following the judgement of human capital theory it can be said that it represents a path for the individual to develop his or her charisma to the labour market .Human capital theory is used as a analysis of theoretical frame , development of competence , formal education and job tenure probably are the crucial aspects for the individual’s perceived employability. As a result investment of individuals in these respects would be essential factors in identifying their perceptions of the possibilities that exist for gaining new employment (Judge and Bretz, 1994 et al, 1995).

Efficiency losses and Gender differences:

In recent times around 50 % of woman around the world are in the labour force officially, approximately 1/3rd of all workers are constituted by women’s. Work unpaid performed by females most of them because following the tradition of division of labour within nature of employment on family farms .Although it attracts pay, men’s work is valued more than women’s. Earnings of women is normally average around 2/3rd of men’s .In general, simply 1/5th of world’s wages accrue to women partly because they are engaged usually in low paying-jobs. Still in these jobs, payment is less usually to women compare to men instead doing comparable work (Bergmann, 1971), the result of discrimination and exclusion of women are solely the gender differences in labour market, to evaluate a method the output and wage are affected under conditions of discrimination it has been projected in the context of racial segregation, According to



References: Tzannatos, Z. (1988) The long run effects of the sex integration of the British labour market. Journal of Economic Studies. 15(1), 1–18 Judge, T.A Judge, T.A., D.M. Cable, J.W. Boudreau and R.D. Bretz (1995) ‘An Empirical Inves- tigation of the Predictors of Executive Career Success’, Personnel Psychology 48(3): Press, 1996 Jeffrey, Robin Horton, S. (1994) Women and Industrialization in Asia, Routledge, London Gustaffson, R Trzcinski, E., Alpert, W.T. (1994) Pregnancy and parental leave benefits in the United States and Canada: Judicial decisions and legislation. Journal of Human Resources. 29(2), 535–555 Mason, M.A MacDonald, M. (1994) Social security policy and gender, Paper presented at the Gender Symposium, World Bank, Poverty and Social Policy Department, Washington DC Goldin, C Ehrenberg, R., Smith, R. (1987) Comparable worth wage adjustments and female employment in the state and local sector. Journal of Labor Economics 5(1), 43–62

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