Abstract: This paper investigates the effect of education on individual income in Turkey. To this end, Mincerian (1974) earning equation is estimated in which income as a function of education, age, square of age and sex. Since all of the variables are in the form discrete choices, an ordered logit model is employed. This model lets to calculate probabilities of achieving higher income given education levels that are not provided by the earlier studies of Tansel (1994), Dayıoglu and Kasnakoglu (1997) and Ozcan et al.. (2003). The empirical findings show that as education level increases, the probability of achieving higher income raises notably. The finding of highest return for university education for both sexes supports the view; education should be considered as an investment and individuals should bear the cost of it to some extent.
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
14375.
Find related papers by JEL classification: I20 - Health, Education, and Welfare - - Education - - - General C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models
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