The Inconsistency of the Quadratic Mincer Equation: A Proof
AUTHORS: Susan S. Hamlen
KEYWORDS: Mincer, Salary, Continuing Education, Optimal Control
JOURNAL NAME: Theoretical Economics Letters, Vol.2 No.2,
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.