Estimation of Education and Experience Effect on Personal Income

اقتصاد پولی مالی

Article 10, Volume 17, Issue 33, January 2011   

Document Type: پژوهشی

DOI: 10.22067/pm.v17i33.27317

Author

Mohammad Lashkari^*

Abstract

Education satisfies the human primary need for knowledge. It is a mean helping to meet other fundamental needs and it facilitates continuance and expedition of community overall development. Education provides required skillful labor for modern and traditional devisions and it increases the labor' skills and its production capacities. It is not olny a mean to improve current generation's income but also it helps to enhance future income distribution and other opportunities.
Theory of human resources assumes that the individuals’ personal income is a function of their education and experience. So, inequality in income distribution can be traced in educational inequality. Schooling is a dynamic process enabling labor’s skill, capability, and return. Thus, it increases the personal and community income.
The current study, based on theory of human resources considering income variations as a function of education and experience level, assumes that the income level is determined by two variables of education and experience. Justifying variations in individual’s personal income with respect to above theory, this research used two logarithmic and semi-logarithmic models to analyze data gathered from four types of educational systems with a sample size of 3000. Cross sectional data estimated by Eviews 5 software package applying OLS method. The following hypotheses tested and approved along with investigating their consistency with theory of human resources:
Personal Income has a direct relationship with schooling.
Personal Income has a direct relationship with Experience.
Men's personal Income is greater than women's income in the same conditions of education and experience.
Return of Education in educational sectors is larger than noneducational sectors.

Keywords

Income; Education; Experience; Age; schooling; Return of Education