Career Origins, On-the-Job Training, and Earnings

Recent policy discussions of the distribution of earnings in the United States have emphasized the effect of formal education and other skill training programs. While the theoretical justification for this approach arises out of human capital analyses, the human capital analyses, as well as the more recent dual labor market analyses also emphasize that on-the-job training is a critical determinant of the income distribution [11; 8]. While a vital determinant of differentials in on-the-job training is the differences that exist between alternative job structures, there has been little analysis of the effect of the characteristics of particular jobs which individuals hold. Rather global measures of onthe-job training (such as years of experience in the labor force) typically are used to analyze the effect of labor market experience on the acquisition of marketable skills [11]. Yet, different "job experiences" obviously result in different types and amounts of on-the-job experience. This article is an attempt to clarify the nature of these differential effects of alternative job experiences by focusing on the effects of career origin on the acquisition of on-the-job training. Earnings differentials generated by on-the-job training in given occupational categories are generated. A central hypothesis is that failure to standardize for career origin incorrectly attributes earnings differentials to differences in formal education, rather than differences in on-the-job training. At least some of the problems in eval