IMPACT OF YEARS OF SCHOOLING AND EXPERIENCE ON THE INCOME LEVEL OF THE EMPLOYEES USING THE MINCER EARNING FUNCTION: SPECIAL REFERENCE TO MALLAWAPITIYA DIVISIONAL SECRETARIAT

Abstract

This earning function is useful as an explanation of historical developments of wage differentials. This study aimed to find the relationship between the income and education and experience. In the most widely used version of Mincer’s “human capital earnings function”, log earnings are modelled as the sum of a linear function of years of education and a quadratic function of years of potential experience. According to the model, there is positive and significant relationship between the years of education and income. Hence, if the years of education increases by the year income will increase by the 0.114%. Even though, years of experience related with the income significantly and negatively. Therefore, this study suggests that if the year of education increases, that will lead to higher earning of the individual and to improve the national income of the country.