Empirical earnings functions for Iran
Some recent studies have debated the appropriateness of semi-log earnings function in approximating actual earnings profiles. This study contributes further to this debate by estimating four specifications of earnings function, namely, semi-log quadratic, semi-log cubic, quadratic and cubic with cross section data for 4035 full-time urban male earners in Iran for 1993. The analysis shows that the semi-log quadratic earnings function fits the actual empirical earnings profiles very poorly. The quadratic earnings function provides a much better approximation to the actual earnings. Measures of out-of-sample prediction errors also show the superiority of quadratic function over others.
Volume (Year): 33 (2001)
Issue (Month): 1 ()
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