Taking a Look at Labor Economics

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Assignment 2 Labor economic A); the mincers equation is a human capital earnings function which, was founded yearsago. Jacob mincer (year) published his familiar sight book on schooling, experience and earnings and had a profound with lasting influence on empirical work in the field of labour economics. However his equation has been examined on many datasets. In Pereira (2001) he explained that wage equations have been thoroughly researched over the last decades. The equations have been estimated using all or some of these variables in different combination from the econometrics textbooks and that the model causes bias in the coefficients estimated. Mincers framework captures two distinct economic concepts (a) a pricing equations or hedonic wage functions revealing how the labour market rewards productive attributes like the schooling and the work experience and (b) the rate of return to schooling which can be compared with the interest rate to determine optimality of human capital investments (Lemieux, 2006). The mincers wage regressions disregards the endogeneity of the post schooling human capital accumulations and treats schooling and training symmetrically. More precisely the mincerian approach usually ignores the possibility that schooling may change the on the job human capital accumulation process and these refinement would either require the joints modelling of the schooling and training or the non reparability between schooling and experience. In Rosenzweig and
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