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The Inconsistency of the Quadratic Mincer Equation: A Proof

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ABSTRACT

This paper provides a proof that the well-known quadratic Mincer (1974) Equation, wherein the log of wage or salary is a quadratic function of the years of experience, is inconsistent with the usual assumptions of utility maximization. The proof requires the use of the dynamic version of the Mincer Equation and the assumption of an isoelastic marginal utility function. The result is that a polynomial of degree three or greater is required to relate the log of wage or salary to the number of years of experience.

Cite this paper

S. Hamlen, "The Inconsistency of the Quadratic Mincer Equation: A Proof," Theoretical Economics Letters, Vol. 2 No. 2, 2012, pp. 115-120. doi: 10.4236/tel.2012.22021.

References

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