What determines earnings in Ghana? The Human Capital model postulates that the log of earnings of an individual is a function of that individual's productive characteristics. These individual characteristics help explain the marginal productivity and the returns to them. [1] In Mincer (1974) this model was formalized as in equation (1): In equation (1), lnY t is the log of earnings in year t , Educ is years of schooling, Exp is years of cumulative work experience, and X is a vector of other variables. We ran this model for Ghana using GLSS data with X including the variables shown in table 1. We build on Gundersen (2016) in specifying the model used in this analysis. [2] We find that, conditional on age and age squared (as a proxy for experience), sex, parents’ education, occupation, public versus private sector employment, and marital status, an additional year of education boosts annual earnings by 5.7 percent . Experience has a statistically positive marginal effect on an...
Economics, Data Science, Consulting