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  • Help on using coded variables to run the mincer wage equation?

    Hi,

    I'm trying to run the mincer wage equation using ols regression with a random effect model. In my survey data, the education and age variables are coded and the years of experience variable was not given

    However, mincer stated that the years of experience can be obtained using this formula- Years of education-age-5, but since my education variable and age are in codes, it's quite not straightforward to get the potential years of experience.

    I was wondering if I could assume years of education based on the education level and get the midpoint of my age variable(coded 2=18-64) in order to run the mincer wage regression.

    Would that be correct? Would it make the result of my thesis bias?

    Hope to get a response soon

  • #2
    Hello?

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    • #3
      I think if you show a tabulation of your education and age variables, someone should be able to help.

      Code:
      tab educ
      tab age
      I'm not that optimistic, though, because it looks like both variables might be coarsened quite a bit. But you need to show us something about the data.

      Comment


      • #4
        Jeff Wooldridge Thia how my data is coded

        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.

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        • #5
          I see no way of computing an experience variable. You have no variation in age! I suspect only people of traditional working age, 18-64, were included in the sample, and then age wasn’t recorded. The best you can do is put in dummy variables for the different age categories. You cannot estimate the standard Mincer equation.

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