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NOTES ON MINCER'S LOG‐EARNINGS MODEL
Author(s) -
CONLISK JOHN
Publication year - 1987
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.1987.tb00731.x
Subject(s) - earnings , economics , property (philosophy) , function (biology) , rate of return , investment (military) , human capital , econometrics , finance , market economy , philosophy , law , epistemology , evolutionary biology , politics , political science , biology
In his famous human capital model, Mincer provides assumptions under which a worker's annual log‐earnings are a function of years of schooling and years of experience. The function has the important property, widely invoked in empirical studies, that its derivative with respect to schooling equals the rate of return to the schooling investment. It is shown here that some of Mincer's assumptions are not needed for the property to hold, but that other assumptions carry troublesome hidden implications.