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Learning Objectives
In this chapter we will explore:
- The concept of human capital
- Productivity and education
- On-the-job training
- Education as signalling
- Returns to education and education quality
- Discrimination
- The income and earnings distribution in Canada
Individuals with different characteristics usually earn different amounts because their productivity levels differ. While it is convenient to work with a single marginal productivity of labour function to illustrate the functioning of the labour market, as we did in Labour and capital, for the most part wages and earnings vary by education level and experience, and sometimes by ethnicity and gender. In this chapter we develop an understanding of the sources of these differentials.
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