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Spatial Pseudo Panel Data Models with an Application to Mincer Wage Equations

Author

Listed:
  • Selahattin Güriş

    (Marmara University, Department of Econometrics, Istanbul, Turkey)

  • Gizem Kaya Aydın

    (Istanbul Technical University, Department of Management Engineering, Istanbul, Turkey)

Abstract

The studies using Mincer equations are generally applied to cross-sectional data at the micro-level. There are however limited studies conducted with macro or panel data for wage equations. Pseudo panel data methods can be applied to empirical studies by creating cohorts from repeated cross-sectional data in the absence of genuine panel data. Difference in both the human and labour resources according to the spatial positions may also affect the prediction of the wage equations. We aim to introduce the application of spatial pseudo panel models by creating cohorts according to the birth years of employees and regions in which they live from the Turkish household labour survey for the period 2010–2015. As a result, we find that the spatial autocorrelation model is appropriate for wage equations of Turkey. We also find that return of education on wages is 11% while return of experience on wages is 4%.

Suggested Citation

  • Selahattin Güriş & Gizem Kaya Aydın, 2022. "Spatial Pseudo Panel Data Models with an Application to Mincer Wage Equations," Central European Journal of Economic Modelling and Econometrics, Central European Journal of Economic Modelling and Econometrics, vol. 14(1), pages 37-56, March.
    • Handle: RePEc:psc:journl:v:14:y:2022:i:1:p:37-56
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    More about this item

    Keywords

    spatial econometrics; pseudo panel data; Mincer wage equations;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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