Using Longitudinal Data to Estimate Age, Period and Cohort Effects in Earnings Equations

  • James Heckman
  • Richard Robb


The literature on the determinants of earnings suggest an earnings function for individual i which depends on age ai, year t, “vintage” or “cohort” schooling level si, and experience ei. Adopting a linear function to facilitate exposition we may write
$${Y_i}(t,{a_i},{c_i},{e_i},{s_i}) = {\alpha _0} + {\alpha _1}{a_i} + {\alpha _2}t + {\alpha _3}{e_i} + {\alpha _4}{s_i} + {\alpha _5}{c_i}$$
where ei is experience, usually defined for males as age minus schooling, (ei = ai – si),1 and Yi may be any monotone transformation of earnings.


Labor Market American Economic Review Cohort Effect Unobserved Variable Latent Variable Model 
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Copyright information

© Springer-Verlag New York Inc. 1985

Authors and Affiliations

  • James Heckman
    • 1
    • 2
  • Richard Robb
    • 1
    • 2
  1. 1.Department of EconomicsUniversity of ChicagoUSA
  2. 2.National Opinion Research CenterUniversity of ChicagoUSA

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