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Abstract:

Purpose – The purpose of this study is to examine the individualistic and the structural nature of human capital and its relationship with poverty.

Design/methodology/approach – An examination was made of the individual and the interaction effects of three dimensions of human capital (education, training, and health), gender, race, and underemployment on poverty status, after controlling for the direct effect of these variables. The sample included working-age individuals in the USA taken from the 1996 panel of the Survey of Income and Program Participation (SIPP).

Findings – The results show that among the human capital variables, postsecondary education is a particularly important factor associated with poverty among women and minorities. Job training, on the other hand, worsened the economic situation for non-Whites. For individuals with less than post-secondary education, the combined effect of training participation and health status significantly reduced the likelihood of being poor. Underemployment consistently moderated the effects of human capital, gender, and race on poverty status. Interestingly, underemployed women were less likely to be poor compared to those with more secure jobs. Women with training were more likely to be poor when they were underemployed compared to being in good jobs. This same relationship held true for minority groups with training having greater likelihood of being poor when they were underemployed.

Originality/value – This study provides an empirical validation of human capital as the structurally vulnerable attributes that are disproportionately distributed in the labor market for many American poor.

Keywords:

Gender, Human capital, Poverty, Race, Underemployment, United States of America

Article Type:

Research paper

Article URL:

http://www.emeraldinsight.com/10.1108/02610150710726516

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