Human Capital Life Cycle of Earnings Models: A Specific Solution and Estimation

99 Pages Posted: 1 Dec 2006 Last revised: 8 Jul 2010

Date Written: July 1973

Abstract

The purpose of this paper is to consider human capital models of earning behavior over an individual lifetime. A general class of life cycle models relating to individual earnings behavior is developed by considering alternative formulation of the basic Ben- Porath type model. An explicit solution to a specific formulation within this general class is considered in some detail. An empirical development of this explicit earnings function is estimated using data on a cohort of individuals surveyed at some point in their lifetime. The empirical estimates are discussed in detail. The estimated earnings function is then used to predict and individual's discounted present value of lifetime earnings.

Suggested Citation

Lillard, Lee A., Human Capital Life Cycle of Earnings Models: A Specific Solution and Estimation (July 1973). NBER Working Paper No. w0004. Available at SSRN: https://ssrn.com/abstract=259316

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