Determinants of earnings in East Java, Indonesia
Date
1991-03
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Abstract
The objective of this study is to determine the determinants of labor earnings in East Java, Indonesia. Using Becker's theory as the basic idea, the theoretical framework of this study, therefore take off from traditional human capital earnings function proposed by Mincer (1970). This theory starts by assuming no environmental inequalities in order to avoid the effects of non-competitive forces on individual choice.
The heterogeneity of labor incomes is based on the individual investment behaviour, and the basic source of heterogeneity is the length of training period. Training raises productivity, but the time spent in training necessitates postponement of earnings to later age. The trainee expects that his occupational incomes in the future will be sufficiently large to compensate for the cost training.