Do Mincerian Wage Equations Inform How Schooling Influences Productivity?
Research output: Working paper › Research
We study the links between the Mincerian wage equation (the cross-sectional relationship between wages and years of schooling) and the human capital production function (the causal effect of schooling on labor productivity). Based on a stylized Mincerian general equilibrium model with imperfect substitutability across skill types and ex ante identical workers, we demonstrate that the mechanism of compensating wage differentials renders the Mincerian wage equation uninformative for the human capital production function. Proper identification of the human capital production function should take into account the equilibrium allocation of individuals across skill types.
Original language | English |
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Number of pages | 16 |
Publication status | Published - 2017 |
Series | University of Copenhagen. Institute of Economics. Discussion Papers (Online) |
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Number | 17-12 |
ISSN | 1601-2461 |
- Faculty of Social Sciences - Mincerian wage equation, human capital production function, skill distribution, compensating wage differentials, golden rule of skill formation
Research areas
ID: 182514366