Education and Life time wage potential

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Education and Life time wage potential

• Chapter 9
• Part 2

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Human Capital

• Human Capital is similar to Physical Capital but
  there are some Important Differences
• Nonpecuniary (non-monetary) issues
• The utility derived from attending School
• The utility of working in an office vs. outdoors

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Human Capital

• It is more difficult to finance human capital
  than it is to finance physical capital
• Why?

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Educational Attainment of the Population by Gender 1970, 1999, and 2003 (Ages 26-64) Educational Attainment of the Population by Gender 1970, 1999, and 2003 (Ages 26-64) Educational Attainment of the Population by Gender 1970, 1999, and 2003 (Ages 26-64) Educational Attainment of the Population by Gender 1970, 1999, and 2003 (Ages 26-64) Educational Attainment of the Population by Gender 1970, 1999, and 2003 (Ages 26-64) Educational Attainment of the Population by Gender 1970, 1999, and 2003 (Ages 26-64) Educational Attainment of the Population by Gender 1970, 1999, and 2003 (Ages 26-64)
1970 1970 1999 1999 2003 2003
Education Level Male () Female () Male () Female () Male () Female ()
lt 4 yrs of H.S. 39.3 38.2 13.6 12.5 16.2 15.6
H. S. 33.5 42.3 32.2 33.8 31.0 33.1
Some College 11.9 10.5 25.4 27.5 24.3 26.2
gt4 yrs of College 15.3 9.0 28.8 26.2 28.5 25.1
Total 100.0 100.0 100.0 100.0 100.0 100.0
2003 is for figures 25 or older 2003 is for figures 25 or older 2003 is for figures 25 or older 2003 is for figures 25 or older 2003 is for figures 25 or older 2003 is for figures 25 or older 2003 is for figures 25 or older
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Educational Attainment of the Population by Gender, Race, and Hispanic Origin 1999 (ages 26-64) Educational Attainment of the Population by Gender, Race, and Hispanic Origin 1999 (ages 26-64) Educational Attainment of the Population by Gender, Race, and Hispanic Origin 1999 (ages 26-64) Educational Attainment of the Population by Gender, Race, and Hispanic Origin 1999 (ages 26-64) Educational Attainment of the Population by Gender, Race, and Hispanic Origin 1999 (ages 26-64) Educational Attainment of the Population by Gender, Race, and Hispanic Origin 1999 (ages 26-64) Educational Attainment of the Population by Gender, Race, and Hispanic Origin 1999 (ages 26-64)
Education Level Percent Percent Percent Percent Percent Percent
Education Level Whites Whites Blacks Blacks Hispanic Hispanic
Male Female Male Female Male Female
lt 4 yrs of H.S. 13.0 11.6 18.4 17.5 41.9 40.4
H. S. 31.8 34.1 39.8 35.1 28.2 27.6
Some College 25.3 27.5 26.4 29.5 18.9 20.0
gt4 yrs of College 29.8 26.8 15.3 18.0 11.0 12.0
Total 100.0 100.0 100.0 100.0 100.0 100.0

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Distribution of Employment by Gender/Race by Education Achievement Male (percent) Distribution of Employment by Gender/Race by Education Achievement Male (percent) Distribution of Employment by Gender/Race by Education Achievement Male (percent) Distribution of Employment by Gender/Race by Education Achievement Male (percent) Distribution of Employment by Gender/Race by Education Achievement Male (percent) Distribution of Employment by Gender/Race by Education Achievement Male (percent) Distribution of Employment by Gender/Race by Education Achievement Male (percent) Distribution of Employment by Gender/Race by Education Achievement Male (percent)
Total Employed Mgmt/ Pro. Tech/ Sales/ Admin Service Precision Prod. Oper. Fabric. Farm Forst Fish
Male 58326 31.16 18.83 8.54 19.73 18.27 3.46
ltHS 6776 5.45 7.04 13.12 27.63 37.03 9.73
HS 18581 11.90 16.37 10.20 28.84 28.66 4.03
ltCL 15007 23.96 25.01 10.38 22.91 15.15 2.60
CL 17961 66.81 20.67 3.54 4.69 3.06 1.23
White 49886 32.33 18.84 7.47 20.49 17.18 3.68
ltHS 5734 5.72 7.13 11.82 28.99 36.12 10.22
HS 15757 12.69 16.47 8.58 30.65 27.36 4.25
ltCL 12756 25.29 24.84 9.31 23.75 13.90 2.90
CL 15639 67.63 20.63 3.25 4.48 2.67 1.34
Black 5702 18.91 17.38 16.13 15.92 29.48 2.16
ltHS 752 3.19 5.32 18.35 19.55 46.28 7.31
HS 2206 6.53 14.51 19.17 18.54 38.85 2.45
ltCL 1655 16.19 24.53 17.10 17.22 24.23 0.73
CL 1088 59.01 20.68 6.99 6.25 6.80 0.28
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Distribution of Employment by Gender/Race by Education Achievement Male (percent) Distribution of Employment by Gender/Race by Education Achievement Male (percent) Distribution of Employment by Gender/Race by Education Achievement Male (percent) Distribution of Employment by Gender/Race by Education Achievement Male (percent) Distribution of Employment by Gender/Race by Education Achievement Male (percent) Distribution of Employment by Gender/Race by Education Achievement Male (percent) Distribution of Employment by Gender/Race by Education Achievement Male (percent) Distribution of Employment by Gender/Race by Education Achievement Male (percent)
Total Employed Mgmt/ Pro. Tech/ Sales/ Admin Service Precision Prod. Oper. Fabric. Farm Forst Fish
Male 58326 31.16 18.83 8.54 19.73 18.27 3.46
ltHS 6776 5.45 7.04 13.12 27.63 37.03 9.73
HS 18581 11.90 16.37 10.20 28.84 28.66 4.03
ltCL 15007 23.96 25.01 10.38 22.91 15.15 2.60
CL 17961 66.81 20.67 3.54 4.69 3.06 1.23
White 49886 32.33 18.84 7.47 20.49 17.18 3.68
ltHS 5734 5.72 7.13 11.82 28.99 36.12 10.22
HS 15757 12.69 16.47 8.58 30.65 27.36 4.25
ltCL 12756 25.29 24.84 9.31 23.75 13.90 2.90
CL 15639 67.63 20.63 3.25 4.48 2.67 1.34
Black 5702 18.91 17.38 16.13 15.92 29.48 2.16
ltHS 752 3.19 5.32 18.35 19.55 46.28 7.31
HS 2206 6.53 14.51 19.17 18.54 38.85 2.45
ltCL 1655 16.19 24.53 17.10 17.22 24.23 0.73
CL 1088 59.01 20.68 6.99 6.25 6.80 0.28
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Distribution of Employment by Gender/Race by Education Achievement Male (percent) Distribution of Employment by Gender/Race by Education Achievement Male (percent) Distribution of Employment by Gender/Race by Education Achievement Male (percent) Distribution of Employment by Gender/Race by Education Achievement Male (percent) Distribution of Employment by Gender/Race by Education Achievement Male (percent) Distribution of Employment by Gender/Race by Education Achievement Male (percent) Distribution of Employment by Gender/Race by Education Achievement Male (percent) Distribution of Employment by Gender/Race by Education Achievement Male (percent)
Total Employed Mgmt/ Pro. Tech/ Sales/ Admin Service Precision Prod. Oper. Fabric. Farm Forst Fish
Male 58326 31.16 18.83 8.54 19.73 18.27 3.46
ltHS 6776 5.45 7.04 13.12 27.63 37.03 9.73
HS 18581 11.90 16.37 10.20 28.84 28.66 4.03
ltCL 15007 23.96 25.01 10.38 22.91 15.15 2.60
CL 17961 66.81 20.67 3.54 4.69 3.06 1.23
White 49886 32.33 18.84 7.47 20.49 17.18 3.68
ltHS 5734 5.72 7.13 11.82 28.99 36.12 10.22
HS 15757 12.69 16.47 8.58 30.65 27.36 4.25
ltCL 12756 25.29 24.84 9.31 23.75 13.90 2.90
CL 15639 67.63 20.63 3.25 4.48 2.67 1.34
Black 5702 18.91 17.38 16.13 15.92 29.48 2.16
ltHS 752 3.19 5.32 18.35 19.55 46.28 7.31
HS 2206 6.53 14.51 19.17 18.54 38.85 2.45
ltCL 1655 16.19 24.53 17.10 17.22 24.23 0.73
CL 1088 59.01 20.68 6.99 6.25 6.80 0.28
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Distribution of Employment by Gender/Race by Education Achievement Female (percent) Distribution of Employment by Gender/Race by Education Achievement Female (percent) Distribution of Employment by Gender/Race by Education Achievement Female (percent) Distribution of Employment by Gender/Race by Education Achievement Female (percent) Distribution of Employment by Gender/Race by Education Achievement Female (percent) Distribution of Employment by Gender/Race by Education Achievement Female (percent) Distribution of Employment by Gender/Race by Education Achievement Female (percent) Distribution of Employment by Gender/Race by Education Achievement Female (percent)
Total Employed Mgmt/ Pro. Tech/ Sales/ Admin Service Precision Prod. Oper. Fabric. Farm Forst Fish
Female 49805 34.98 38.88 15.45 2.15 7.51 1.03
ltHS 4129 5.98 20.71 40.32 4.48 25.50 3.00
HS 16177 14.46 47.46 21.60 3.12 11.75 1.25
ltCL 14704 29.13 50.18 13.73 1.88 4.30 0.78
CL 14795 70.94 23.35 3.49 0.71 1.03 0.48
White 41096 36.50 39.51 13.98 2.04 6.82 1.17
ltHS 3132 6.35 22.16 37.77 4.60 25.54 3.58
HS 13383 15.88 49.65 19.44 2.97 10.64 1.43
ltCL 12072 30.51 50.12 12.86 1.81 3.81 0.90
CL 12509 71.88 22.76 3.26 0.61 0.95 0.54
Black 6360 25.74 36.32 24.65 2.23 10.79 0.25
ltHS 724 4.42 16.30 53.73 3.45 20.86 1.10
HS 2219 9.60 36.37 33.62 3.02 17.21 0.27
ltCL 2093 22.98 50.45 18.01 1.82 6.64 0.10
CL 1324 68.88 24.85 4.31 0.83 1.06 0.08
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All Females Employment Distribution According To
Education Level
80.00
70.00
60.00
50.00
Percent
40.00
30.00
ltHS
HS
20.00
ltCL
CL
10.00
0.00
MGT/PRO
ltHS
HS
TEC/SAL/ADM
SERVICE
Education Level
ltCL
PRE/PROD
OP/FAB
Job Type
CL
F/F/F
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Distribution of Employment by Gender/Race by Education Achievement Female (percent) Distribution of Employment by Gender/Race by Education Achievement Female (percent) Distribution of Employment by Gender/Race by Education Achievement Female (percent) Distribution of Employment by Gender/Race by Education Achievement Female (percent) Distribution of Employment by Gender/Race by Education Achievement Female (percent) Distribution of Employment by Gender/Race by Education Achievement Female (percent) Distribution of Employment by Gender/Race by Education Achievement Female (percent) Distribution of Employment by Gender/Race by Education Achievement Female (percent)
Total Employed Mgmt/ Pro. Tech/ Sales/ Admin Service Precision Prod. Oper. Fabric. Farm Forst Fish
Female 49805 34.98 38.88 15.45 2.15 7.51 1.03
ltHS 4129 5.98 20.71 40.32 4.48 25.50 3.00
HS 16177 14.46 47.46 21.60 3.12 11.75 1.25
ltCL 14704 29.13 50.18 13.73 1.88 4.30 0.78
CL 14795 70.94 23.35 3.49 0.71 1.03 0.48
White 41096 36.50 39.51 13.98 2.04 6.82 1.17
ltHS 3132 6.35 22.16 37.77 4.60 25.54 3.58
HS 13383 15.88 49.65 19.44 2.97 10.64 1.43
ltCL 12072 30.51 50.12 12.86 1.81 3.81 0.90
CL 12509 71.88 22.76 3.26 0.61 0.95 0.54
Black 6360 25.74 36.32 24.65 2.23 10.79 0.25
ltHS 724 4.42 16.30 53.73 3.45 20.86 1.10
HS 2219 9.60 36.37 33.62 3.02 17.21 0.27
ltCL 2093 22.98 50.45 18.01 1.82 6.64 0.10
CL 1324 68.88 24.85 4.31 0.83 1.06 0.08
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Distribution of Employment by Gender/Race by Education Achievement Female (percent) Distribution of Employment by Gender/Race by Education Achievement Female (percent) Distribution of Employment by Gender/Race by Education Achievement Female (percent) Distribution of Employment by Gender/Race by Education Achievement Female (percent) Distribution of Employment by Gender/Race by Education Achievement Female (percent) Distribution of Employment by Gender/Race by Education Achievement Female (percent) Distribution of Employment by Gender/Race by Education Achievement Female (percent) Distribution of Employment by Gender/Race by Education Achievement Female (percent)
Total Employed Mgmt/ Pro. Tech/ Sales/ Admin Service Precision Prod. Oper. Fabric. Farm Forst Fish
Female 49805 34.98 38.88 15.45 2.15 7.51 1.03
ltHS 4129 5.98 20.71 40.32 4.48 25.50 3.00
HS 16177 14.46 47.46 21.60 3.12 11.75 1.25
ltCL 14704 29.13 50.18 13.73 1.88 4.30 0.78
CL 14795 70.94 23.35 3.49 0.71 1.03 0.48
White 41096 36.50 39.51 13.98 2.04 6.82 1.17
ltHS 3132 6.35 22.16 37.77 4.60 25.54 3.58
HS 13383 15.88 49.65 19.44 2.97 10.64 1.43
ltCL 12072 30.51 50.12 12.86 1.81 3.81 0.90
CL 12509 71.88 22.76 3.26 0.61 0.95 0.54
Black 6360 25.74 36.32 24.65 2.23 10.79 0.25
ltHS 724 4.42 16.30 53.73 3.45 20.86 1.10
HS 2219 9.60 36.37 33.62 3.02 17.21 0.27
ltCL 2093 22.98 50.45 18.01 1.82 6.64 0.10
CL 1324 68.88 24.85 4.31 0.83 1.06 0.08
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Conclusions

• As compared to the 1970s, at the end of the XX
  Century, American women have achieved parity in
  education attainments
• A white male college graduate is more likely to
  achieve managerial or professional status than
  the black male counterpart

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Conclusions (continuation)

• A black male with less than a high school degree
  is more likely to be an operator or fabricator
  than the white male counterpart
• A white male with a high school degree is nearly
  twice as likely to be in managerial or
  professional status than the black counterpart

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Conclusions (continuation)

• A white female with a high school degree is more
  likely to be in a technical/sales/administrative
  job than the black female counterpart.
• Black female college graduate is about as likely
  as her white counterpart to be in a managerial or
  professional job

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Income

• Thus it appears that gender, race and education
  have an impact on the type of jobs and that has
  an impact on the wages
• Recall from an earlier handout the following table

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HOUSEHOLD DATA

HOUSEHOLD DATA ANNUAL AVERAGES

ANNUAL AVERAGES
39. Median weekly earnings of full-time wage
and salary workers by detailed occupation and
sex (Numbers in thousands)







2005







Both sexes Men
Women
Occupation





Number Median Number
Median Number Median

of weekly of weekly of
weekly
workers earnings
workers earnings workers earnings





Total, 16 years and
over..............................................
. 103,560 651 58,406 722 45,154
585 Management, professional, and related
occupations...................... 36,908
937 18,311 1,113 18,597 813
Management, business, and financial operations
occupations... ..... 14,977 997 8,195
1,167 6,782 847 Professional and
related occupations..........................
.... 21,931 902 10,116 1,058 11,815
792 Service occupations....................
........................... .... 14,123 413
7,024 478 7,099 379 Sales and
office occupations................................
....... ... 25,193 575 9,539 690
15,654 520 Sales and related
occupations......................................
10,031 622 5,582 762 4,449
483 Office and administrative support
occupations...................... 15,161
550 3,957 605 11,205 533
Natural resources, construction, and maintenance
occupations........... 12,086 623 11,569
628 517 486 Farming,
fishing, and forestry occupations.................
........ 755 372 601 388
154 327 Construction and extraction
occupations............................ 6,826
604 6,663 606 163 480
Installation, maintenance, and repair
occupations.................. 4,504 705
4,305 706 199 691 Production,
transportation, and material moving
occupations............ 15,251 540 11,963
591 3,288 420 Production
occupations.......................................
... .. 8,403 538 5,991 608
2,412 423 Transportation and material
moving occupations................... . 6,848
543 5,972 574 876 412
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Marital Status

• Since financing Human Capital is so expensive and
  uncertain
• The marital status of the individual may have
  some barring on the investment

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Women Have not Always faired as well

• Early in the XX Century women were not even
  allowed to obtain Professional degrees
• Very few went beyond high school

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Percentage of Degrees Awarded to Women by Level, 1929-1930 to 2002-2003 Percentage of Degrees Awarded to Women by Level, 1929-1930 to 2002-2003 Percentage of Degrees Awarded to Women by Level, 1929-1930 to 2002-2003 Percentage of Degrees Awarded to Women by Level, 1929-1930 to 2002-2003 Percentage of Degrees Awarded to Women by Level, 1929-1930 to 2002-2003 Percentage of Degrees Awarded to Women by Level, 1929-1930 to 2002-2003
Years Percent Percent Percent Percent Percent
Years Associate Bachelors Masters Doctors 1st Professional
1929-30 n.a. 39.9 40.4 15.4 n.a.
1960-61 n.a. 38.5 31.7 10.5 2.7
1970-71 42.9 43.4 40.1 14.3 6.3
1980-81 54.7 49.8 50.3 31.1 26.6
1990-91 58.8 53.9 53.6 37.0 39.1
1992-93 58.8 54.3 54.2 38.1 40.1
1996-97 60.8 55.6 56.9 40.8 42.1
1999-00 60.2 57.2 58.0 44.4 45.0
2002-03 60.0 57.5 58.8 48.1 47.8

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Associates Degrees Earned by Race/Ethnicity
Race or Ethnicity YEAR YEAR YEAR
Race or Ethnicity 1981 1990 2003
Race or Ethnicity Number/Percent Number/Percent Number/Percent
Race or Ethnicity 410,174 455,102 635,912
White 82.7 82.8 69.2
Black 8.6 7.5 11.9
Hispanic 4.3 4.7 10.5
Asian 2.1 2.9 5.2
American Indian 0.6 0.8 1.2
Non-Resident Alien 1.6 1.3 2.1
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Bachelors Degrees Earned by Race/Ethnicity
Race or Ethnicity YEAR YEAR YEAR
Race or Ethnicity 1981 1990 2003
Race or Ethnicity Number/Percent Number/Percent Number/Percent
Race or Ethnicity 934,800 1,051,344 1,348,503
White 86.4 84.4 73.7
Black 6.5 5.8 9.2
Hispanic 2.3 3.1 6.6
Asian 2.0 3.7 6.5
American Indian 0.4 0.4 0.7
Non-Resident Alien 2.4 2.5 3.2
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Masters Degrees Earned by Race/Ethnicity
Race or Ethnicity YEAR YEAR YEAR
Race or Ethnicity 1981 1990 2003
Race or Ethnicity Number/Percent Number/Percent Number/Percent
Race or Ethnicity 294,183 324,301 512,645
White 82.0 78.9 66.7
Black 5.8 3.9 8.6
Hispanic 2.2 1.4 4.9
Asian 2.1 2.7 5.3
American Indian 0.4 0.4 0.6
Non-Resident Alien 7.5 12.8 14.0
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Doctors Degrees Earned by Race/Ethnicity
Race or Ethnicity YEAR YEAR YEAR
Race or Ethnicity 1981 1990 2003
Race or Ethnicity Number/Percent Number/Percent Number/Percent
Race or Ethnicity 32,839 38,371 46,024
White 78.9 68.3 60.2
Black 3.9 3.0 5.5
Hispanic 1.4 2.0 3.4
Asian 2.7 3.2 5.3
American Indian 0.4 0.3 0.4
Non-Resident Alien 12.8 23.2 25.3
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1st Professional Degrees Earned by Race/Ethnicity
Race or Ethnicity YEAR YEAR YEAR
Race or Ethnicity 1981 1990 2003
Race or Ethnicity Number/Percent Number/Percent Number/Percent
Race or Ethnicity 71,340 70,988 80,810
White 90.5 85.2 72.6
Black 4.1 4.8 7.1
Hispanic 2.2 3.4 5.1
Asian 2.0 4.7 12.1
American Indian 0.3 0.4 0.7
Non-Resident Alien 0.9 1.5 2.4
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But What is The Degree for?

• Are women selecting specific fields or are they
  searching for all fields
• Is there any fields that they avoid and what are
  the requirements

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Percentage of Women obtain a Bachelors Degree tbl 288 Percentage of Women obtain a Bachelors Degree tbl 288 Percentage of Women obtain a Bachelors Degree tbl 288
Discipline 1965-1966 1996-1997
Agricultural and Special Resources 2.7 39.0
Architecture and related Programs 4.0 35.9
Biological vs. Life Science 28.2 53.9
Business Administration 8.5 48.6
Computer and Information Services 13.0 27.2
Education 75.3 75.0
Engineering 0.4 16.6
English and English Literature 66.2 66.5
Foreign Languages 70.7 69.7
Health 76.9 81.5
Home Economics 97.5 88.4
Mathematics 33.3 46.1
Physical science and science technology 13.6 37.4
Psychology 41.0 73.0
Economics 9.8 30.9
History 34.6 38.4
Sociology 39.6 68.3

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Relating Education and Wages

• The Following Data Show the relation between
  Education and wages

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