The Effect of Human Capital, Socioeconomic, and Labor Market Factors on Wages

Comprehensive wage offer models are developed to measure the direction and size of effects of human capital variables, socioeconomic characteristics, and structural components of the labor market on wages of men and women, con trolling for race and age interaction. Nationally representative data from the Sur vey of Consumer Finances provide work history information. Maximum likelihood estimates are used to correct for sample selection bias. A major contribution is control for interaction of age with other explanatory variables in both the probit and wage offer analyses. Numerous variables significantly increase or decrease the likelihood of white women being wage or salary earners, but not white men or nonwhite women. Factors affecting wages differ by gender, race, and age cohort. In general, higher levels of education and tenure, and presence in the professional, technical, administrative, and managerial occupation group have a positive effect on wages. 1989 American Association of Family and Consumer Sciences