ABSTRACT
This chapter focuses on income determination studies, many of which have restricted their samples to manufacturing. It suggests that existing theories of the labor force, including both human capital theory and its alternatives, best fit the manufacturing sector but are not as easily applied to others. A variable for the square of experience was also included to account for the deterioration of human capital over time. The income determination model includes variables to test aspects of the claims of internal, dual, and segmented labor market theories. Neither dual-sector nor multivariate models sufficiently explained the reward processes within firms for different types of workers, even though wage or income determination has been a primary emphasis of this literature. Work on internal labor markets has concentrated on occupational linkages and mobility. The implementation of the internal labor market is a constant source of tension among management, the union, and the workers.
