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Mincer Earnings Functions for the Netherlands 1962–2012

Author

Listed:
  • Joop Hartog

    (University of Amsterdam)

  • Sander Gerritsen

    (CPB Netherlands Bureau for Economic Policy Analysis)

Abstract

We extract estimation results on the Mincer earnings function from four earlier studies and add new results from a recent dataset. We check for differences related to differences in earnings concepts and in sampling frame, to reduce bias in intertemporal comparison. Jointly, the studies show a clear U-shaped development in the rate of return to education from 1962 to 2012, with a bottom in the 1980s. We explain this from Tinbergens’s race between suppy and demand (schooling and technology) and suggest this may be a widespread international pattern. Returns to potential experience show no marked time trend. The paper has been presented at the CPB-OCW Workshop “Returns to education: research and policy”, The Hague, December 17 2015. We are grateful to Bas ter Weel and Harry Patrinos for comments on an earlier version and to Wiljan van den Berge and Dinand Webbink for providing us with their data. We also thank two anonymous referees for useful suggestions.

Suggested Citation

  • Joop Hartog & Sander Gerritsen, 2016. "Mincer Earnings Functions for the Netherlands 1962–2012," De Economist, Springer, vol. 164(3), pages 235-253, September.
    • Handle: RePEc:kap:decono:v:164:y:2016:i:3:d:10.1007_s10645-016-9279-y
    DOI: 10.1007/s10645-016-9279-y
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    References listed on IDEAS

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    1. Heckman, James J. & Lochner, Lance J. & Todd, Petra E., 2006. "Earnings Functions, Rates of Return and Treatment Effects: The Mincer Equation and Beyond," Handbook of the Economics of Education, in: Erik Hanushek & F. Welch (ed.), Handbook of the Economics of Education, edition 1, volume 1, chapter 7, pages 307-458, Elsevier.
    2. Lawrence F. Katz & Kevin M. Murphy, 1992. "Changes in Relative Wages, 1963–1987: Supply and Demand Factors," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(1), pages 35-78.
    3. Daron Acemoglu & David Autor, 2012. "What Does Human Capital Do? A Review of Goldin and Katz's The Race between Education and Technology," Journal of Economic Literature, American Economic Association, vol. 50(2), pages 426-463, June.
    4. Christopher R. Taber, 2001. "The Rising College Premium in the Eighties: Return to College or Return to Unobserved Ability?," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 68(3), pages 665-691.
    5. Phil Lewis & Michael Corliss & Anne Daly, 2013. "The Rate of Return to Higher Education Over the Business Cycle," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 16(2), pages 219-236.
    6. Claudio E. Montenegro & Harry Anthony Patrinos, 2014. "Comparable Estimates of Returns to Schooling Around the World," Working Papers wp390, University of Chile, Department of Economics.
    7. Jacob A. Mincer, 1974. "Schooling and Earnings," NBER Chapters, in: Schooling, Experience, and Earnings, pages 41-63, National Bureau of Economic Research, Inc.
    8. Oosterbeek, Hessel & Webbink, Dinand, 2007. "Wage effects of an extra year of basic vocational education," Economics of Education Review, Elsevier, vol. 26(4), pages 408-419, August.
    9. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1.
    10. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The skill content of recent technological change: an empirical exploration," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
    11. Johnson,Paul & Zimmermann,Klaus F. (ed.), 1993. "Labour Markets in an Ageing Europe," Cambridge Books, Cambridge University Press, number 9780521443982.
    12. Dinand Webbink, 2007. "Returns to University Education: Evidence from a Dutch Institutional Reform," Economica, London School of Economics and Political Science, vol. 74(293), pages 113-134, February.
    13. Hartog, Joop, 1980. "Earnings and Capability Requirements," The Review of Economics and Statistics, MIT Press, vol. 62(2), pages 230-240, May.
    14. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, in: Schooling, Experience, and Earnings, pages 1-4, National Bureau of Economic Research, Inc.
    15. Colm Harmon & Ian Walker & Niels Westergaard-Nielsen (ed.), 2001. "Education and Earnings in Europe," Books, Edward Elgar Publishing, number 2237.
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    Cited by:

    1. Bussink, Henri & ter Weel, Bas, 2022. "Costs and Benefits of an Individual Learning Account (ILA): A Simulation Analysis for the Netherlands," IZA Discussion Papers 15649, Institute of Labor Economics (IZA).
    2. Yasser Razak Hussain & Pranab Mukhopadhyay, 2023. "How Much do Education, Experience, and Social Networks Impact Earnings in India? A Panel Data Analysis Disaggregated by Class, Gender, Caste and Religion," SAGE Open, , vol. 13(4), pages 21582440231, December.
    3. Bussink, Henri & ter Weel, Bas, 2023. "Costs and benefits of an individual learning account (ILA): A simulation analysis for the Netherlands," Economic Modelling, Elsevier, vol. 118(C).

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    More about this item

    Keywords

    Returns to education; Mincer earnings equation; Race supply and demand;
    All these keywords.

    JEL classification:

    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • J - Labor and Demographic Economics
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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