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How well does a dynamic Mincer equation fit NLSY data? Evidence based on a simple wage-bargaining model

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Abstract

This article argues that a dynamic Mincer equation can be seen as the solution of a simple wage-bargaining model between a worker and an employer where the unemployment-benefit level, affecting the outside option of the worker, depends on past wages. Further, it shows that this model provides a good fit of the US National Longitudinal Survey of Youth data. The evidence is robust to a number of sensitivity checks.

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Authors and Affiliations

  1. Departamento de Gestão e Economia, Universidade da Madeira, Campus da Penteada, 9000-390, Funchal, Portugal

    Corrado Andini

  2. Centro de Estudos de Economia Aplicada do Atlântico (CEEAplA), 9501-801, Ponta Delgada, Portugal

    Corrado Andini

  3. Institute for the Study of Labor (IZA), 53072, Bonn, Germany

    Corrado Andini

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  1. Corrado Andini
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Correspondence to Corrado Andini.

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Andini, C. How well does a dynamic Mincer equation fit NLSY data? Evidence based on a simple wage-bargaining model. Empir Econ 44, 1519–1543 (2013). https://doi.org/10.1007/s00181-012-0581-5

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  • DOI: https://doi.org/10.1007/s00181-012-0581-5

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