Journal of Labor Economics Vol. 8 No. 2 1990
Empirical Age-Earnings Profiles
Abstract
The "human capital earnings function," in which earnings are expressed as a quadratic in potential experience, is probably the most widely accepted empirical specification in economics. In spite of its widespread acceptance, the human capital earnings function provides a very poor approximation of the true empirical relationship between earnings and experience. The standard formulation understates early career earnings growth by about 30%-50% and overstates midcareer growth by 20%-50%. However, simple alternative specifications that fit the data are available.
- DOI
- 10.1086/298220
- Volume
- 8
- Issue
- 2
- Pages
- 202-229
- Language
- en
- Sources
- openalex crossref