Empirical Evidence on the Functional Form of the Earnings-Schooling Relationship

Abstract

Abstract This article presents empirical evidence on the correct functional form of the regression relationship between earnings as regressand and schooling and experience as regressors. Evidence from several bodies of data suggests that among simple transformations the natural logarithm of earnings is the correct dependent variable while the best simple specification of the regressors is one advanced by Jacob Mincer on theoretical grounds.