Help on mincer equation- education and experience

[mama kay]

Hi,

I'm trying to run ols regression with a random effect model using a mincer equation. I have the following challenges;

Years of education in the survey data is stated like this;
01 = No formal/ primary education
02 = Lower secondary
03 = Upper secondary
04 = Post leaving cert
05 = Third level – non degree
06 = Third level – degree or above
xx = Other/not stated
‘ ‘ = Not applicable (person under 16).

Age in the survey data is stated like this;

2 = 18-64

The mincer equation states that we can get the potential years of experience by this- Years of education- Age- 5 but since age and the years of education are expressed in codes. I need an advice on how i can run the mincer equation on stata.

log(wages) = β0 + β1educi + β2experi + β3exper² + . . . + ui

[mama kay]

I would appreciate the above question could be attended to.

[Maarten Buis]

Short answer: You can't.

Longer answer: you don't have years of education, but educational attainment. You could try to approximate years from that, which would be imperfect but probably somewhat defensible. The bigger problem is your age variable. If you have a category covering 18-64, then that covers most of your working live in one code. There is no way to distinguish between persons working 1 year or 40 years. The data is just too crude and cannot be saved for your purpose. So either study something else with that data or find some other data.

[mama kay]

Short answer: You can't.

Longer answer: you don't have years of education, but educational attainment. You could try to approximate years from that, which would be imperfect but probably somewhat defensible. The bigger problem is your age variable. If you have a category covering 18-64, then that covers most of your working live in one code. There is no way to distinguish between persons working 1 year or 40 years. The data is just too crude and cannot be saved for your purpose. So either study something else with that data or find some other data.

Thank you very much