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Women's Wages: Cohort Differences in Returns to Education and Training Over Time

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Abstract:

Objective.

This article examines the effects of education and work-related training on wage-growth trajectories for two cohorts of women as they aged from their early 20s and 30s into their early 30 s and 40 s. I test whether occupational training compensates for an earlier lack of education, thereby decreasing earnings inequality over time within cohorts. Because the broader economic context may influence the relationship between wages, education, and training, I test the assumption that the experiences of a given cohort may be generalized to others. Methods.

Following NLS Young Women between 1977 and 1987 and NLSY79 Women between 1988 and 1998, growth-curve analyses test whether returns to investments in human capital vary over time, across and within cohorts. Results. Women who did not update their skills over time experienced stagnation or declines in real wages, leading to growing wage inequality within education levels. However, women without a high school degree who engaged in on-the-job training experienced the greatest returns to training, thus reducing the initial education-based wage gap. Conclusion.

Education and training in adulthood can deflect the accumulation of disadvantage, but can also solidify an already uneven distribution of resources across social strata.

Document Type: Research Article

DOI: http://dx.doi.org/10.1111/j.0038-4941.2005.00345.x

Affiliations: Duke University

Publication date: December 1, 2005

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