The Experience‐Earnings Profile in Australia

Abstract

This paper investigates the goodness‐of‐fit' and effect on estimates of the experience‐earnings profile of alternative specifications of the human capital earnings function for a sample of full‐time male workers in Australia. It is concluded that it is difficult to differentiate between specifications of the earnings function which include a cubic experience term, cubic plus quartic experience terms, or a linear spline function in experience–each of these specifications appears to marginally dominate the quadratic specification and a non‐parametric approach. A modified Gompertz function is found to perform poorly. Copyright © 1994, Wiley Blackwell. All rights reserved