Events and Meetings of Italian Statistical Society, Statistics and Demography: the Legacy of Corrado Gini

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Semi-parametric estimation of the rate of return to education
Antonio Punzo

Last modified: 2015-09-05


The Mincer earnings function is a regression model that explainsearnings as a convenient function of schooling and experience. The model hasbeen examined on many datasets and it is one of the most widely used modelsin empirical economics. In many circumstances, however, due to unobservedheterogeneity, a single Mincer’s regression is inadequate. Moreover, whatever(concomitant) information is available about the nature of such a heterogeneityshould be incorporated in an appropriate manner. Motivated by theseconsiderations, we propose a mixture of Mincer’s models with concomitantvariables: it simultaneously provides a flexible generalization of the Mincermodel, a breakdown of the population into several homogeneous subpopulations,and an explanation of the unobserved heterogeneity. The proposal ismotivated and illustrated via an application to data provided by the Bankof Italy’s Survey of Household Income and Wealth in 2012.

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