Socioeconomic Background, Schooling, Experience and Monetary Rewards in the United States

Using a selective sample from the 1977 Panel Study of Income Dynamics, the authors investigate the relations among schooling, job experience, socioeconomic status (SES), IQ, and earnings in the United States. In contrast to the results for the United Kingdom reported by John Papanicolaou and George Psacharopoulos, we find no interaction effect on earnings between schooling and SES. A positive interaction effect on earnings , however, is found between experience and SES. Introducing IQ in the analysis leaves the above-mentioned results unchanged. It is argued that differences between the U.S. and the U.K. might be due to cultural and labor- market factors. Copyright 1986 by The Review of Economic Studies Limited.