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The “Mincer Equation” Thirty Years After Schooling, Experience, and Earnings

  • Thomas Lemieux

Abstract

This paper evaluates the empirical performance of the standard Mincer earnings equation thirty years after the publication of Schooling, Experience and Earnings. Over this period, there has been a dramatic expansion in micro data and estimation techniques available to labor economists. How does the Mincer equation stand in light of these advances in empirical labor economics? Is it time to revise our benchmark model? On the basis of the existing literature and some new empirical estimates, I conclude that the Mincer equation remains an accurate benchmark for estimating wage determination equations provided that it is adjusted by (1) including a quartic function in potential experience instead of just a quadratic, (2) allowing for a quadratic term in years of schooling to capture the growing convexity in the relationship between schooling and wages, and (3) allowing for cohort effects to capture the dramatic growth in returns to schooling among cohorts born after 1950.

Keywords

Human Capital Minimum Wage Current Population Survey Relative Supply Weekly Earning 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer Science+Business Media, Inc. 2006

Authors and Affiliations

  • Thomas Lemieux
    • 1
  1. 1.University of British ColumbiaCanada

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