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The Effect of Education on the Wages of Urban and Rural Workers: Application of the Mixed Effects Model
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Vali Gholamzadeh1    , Samad Hekmatifarid 2, Seyed jamalaldin Moseni zonouzi3 |
1- Ph.D. Candidate Of Economics, University of Urumia
2- Associate Professor of Economics, University of Urumia , S.Hekmati@Urmia.ac.ir
3- Associate Professor of Economics, University of Urumia |
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Abstract: (911 Views) |
Introduction: In recent years, a lot of investment has been made by the government to increase the number of university graduates. These investments have been made in order to improve the living conditions by increasing the wages of the workforce. Increasing the education of the workforce through the promotion of human capital can increase the productivity and wages of the workforce. But this happens in a situation where the education of the workforce is in line with the needs of the labor market. Lack of education or required education can even have a negative effect on the wages of the workforce.
Purpose and method: Therefore, the main goal of this study is to investigate the effect of education on the wages of urban and rural workers. For this purpose, the raw data of household cost-income of 2019 for the provinces of the country is used. The calculation of education is done by Duncan and Hoffman's method, and Mincer's wage function is estimated by the mixed effects method (multilevel model). In this research, Iranian people (urban and rural) in different provinces are studied. Therefore, the data are analyzed at both individual and province levels. Hence, according to the two-level nature of the data, multi-level patterns are a suitable method for this study. In this type of modeling, the complex structures of economic-social life are considered in the framework of natural and social groupings such as geographical regions.
In this research, using the above method, the effect of the variables of the individual's appropriate years of education, over-required education, under-required education, years of potential experience, the product of potential experience years in over-required, appropriate and under-required education respectively, gender and the control variable of the group wage employment have been investigated in urban and rural areas.
Research results: The estimation results show that the required education in the rural areas and the insufficient education in the urban areas have a negative effect on the wages of the labor force. Also the variable of experience in both urban and rural areas has a positive effect and the variable of being a woman has a negative effect on the wages of the labor force in both.
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Article number: 3 |
| Keywords: Labor Market, Mixed Effexts Model, Multilevel Effect, Overeducation, Wage JEL Classification: E20, H75, J00. |
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Full-Text [PDF 1076 kb]
(460 Downloads)
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Type of Study: Research |
Subject:
Special
Received: 2023/06/30 | Accepted: 2023/12/1
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