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A Dynamic Mincer Equation with an Application to Portuguese Data

  • Andini, Corrado


    (University of Madeira)

This paper argues in favor of a dynamic specification of the Mincer equation, where past observed earnings play the role of additional explanatory variable for current observed earnings. A dynamic approach offers an explanation why the return to schooling in terms of observed earnings is not independent of labor-market experience, as suggested by some recent empirical evidence for the United States.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2897.

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Length: 26 pages
Date of creation: Jul 2007
Date of revision:
Publication status: published in: Applied Economics, 2010, 42 (16), 2091-2098
Handle: RePEc:iza:izadps:dp2897
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  1. Budría, Santiago & Pereira, Pedro T., 2005. "Educational Qualifications and Wage Inequality: Evidence for Europe," IZA Discussion Papers 1763, Institute for the Study of Labor (IZA).
  2. Telhado Pereira, Pedro & Silva Martins, Pedro, 2002. "Is there a return-risk link in education?," Economics Letters, Elsevier, vol. 75(1), pages 31-37, March.
  3. Heckman, James J. & Lochner, Lance John & Todd, Petra E., 2003. "Fifty Years of Mincer Earnings Regressions," IZA Discussion Papers 775, Institute for the Study of Labor (IZA).
  4. Heckman, James J. & Lochner, Lance John & Todd, Petra E., 2005. "Earnings Functions, Rates of Return and Treatment Effects: The Mincer Equation and Beyond," IZA Discussion Papers 1700, Institute for the Study of Labor (IZA).
  5. Murphy, Kevin M & Welch, Finis, 1990. "Empirical Age-Earnings Profiles," Journal of Labor Economics, University of Chicago Press, vol. 8(2), pages 202-29, April.
  6. Corrado Andini, 2007. "The total impact of schooling on within-groups wage inequality in Portugal," Applied Economics Letters, Taylor & Francis Journals, vol. 15(2), pages 85-90.
  7. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
  8. Griliches, Zvi, 1977. "Estimating the Returns to Schooling: Some Econometric Problems," Econometrica, Econometric Society, vol. 45(1), pages 1-22, January.
  9. Martins, Pedro S. & Pereira, Pedro T., 2004. "Does education reduce wage inequality? Quantile regression evidence from 16 countries," Labour Economics, Elsevier, vol. 11(3), pages 355-371, June.
  10. Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863 Elsevier.
  11. John B. Taylor, 1998. "Staggered Price and Wage Setting in Macroeconomics," NBER Working Papers 6754, National Bureau of Economic Research, Inc.
  12. Omar Arias & Kevin F. Hallock & Walter Sosa Escudero, 1999. "Individual Heterogeneity in the Returns to Schooling: Instrumental Variables Quantile Regression using Twins Data," Department of Economics, Working Papers 016, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata.
  13. Pereira, Pedro T. & Martins, Pedro S., 2001. "Returns to Education and Wage Equations," IZA Discussion Papers 298, Institute for the Study of Labor (IZA).
  14. Corrado Andini, 2007. "Returns to education and wage equations: a dynamic approach," Applied Economics Letters, Taylor & Francis Journals, vol. 14(8), pages 577-579.
  15. Philip A. Trostel, 2005. "Nonlinearity in the return to education," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 191-202, May.
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