Spatial Pseudo Panel Data Models with an Application to Mincer Wage Equations

Selahattin Güriş () and Gizem Kaya Aydın ()
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Selahattin Güriş: Marmara University, Department of Econometrics, Istanbul, Turkey
Gizem Kaya Aydın: Istanbul Technical University, Department of Management Engineering, Istanbul, Turkey

Central European Journal of Economic Modelling and Econometrics, 2022, vol. 14, issue 1, 37-56

Abstract: The studies using Mincer equations are generally applied to cross-sectional data at the micro-level. There are however limited studies conducted with macro or panel data for wage equations. Pseudo panel data methods can be applied to empirical studies by creating cohorts from repeated cross-sectional data in the absence of genuine panel data. Difference in both the human and labour resources according to the spatial positions may also affect the prediction of the wage equations. We aim to introduce the application of spatial pseudo panel models by creating cohorts according to the birth years of employees and regions in which they live from the Turkish household labour survey for the period 2010–2015. As a result, we find that the spatial autocorrelation model is appropriate for wage equations of Turkey. We also find that return of education on wages is 11% while return of experience on wages is 4%.

Keywords: spatial econometrics; pseudo panel data; Mincer wage equations (search for similar items in EconPapers)
JEL-codes: C31 C33 E24 (search for similar items in EconPapers)
Date: 2022
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