Empirical earnings functions for Iran |
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Authors: | Satya Paul Ahmad Assadzadeh |
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Institution: | 1. Department of Economics , California Polytechnic State University , San Luis Obispo, CA 93407mmarlow@calpol.edu |
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Abstract: | Some recent studies have debated the appropriateness of semi-log earnings function in approximating actual earnings profiles. This study contributes further to this debate by estimating four specifications of earnings function, namely, semi-log quadratic, semi-log cubic, quadratic and cubic with cross section data for 4035 full-time urban male earners in Iran for 1993. The analysis shows that the semi-log quadratic earnings function fits the actual empirical earnings profiles very poorly. The quadratic earnings function provides a much better approximation to the actual earnings. Measures of out-of-sample prediction errors also show the superiority of quadratic function over others. |
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