The Effect of Education and Experience on Individual Income

The aim of this article is to evaluate the effect of education and job experience on the work-related earnings. The relationships between earnings and education have long been studied. In the present study, the Mincerian wage equation, and Cobb-Douglas production function was used to examine the relationship between education and job experience and earnings from work. To estimate of the regression equations, we were used the cross-sectional data that extracted from the expenditure and income urban and rural households survey conducted by Statistical Center of Iran in 1384-1393. As well as, this study has considered seven levels of education for individuals: illiterate, elementary, middle, Diploma, Associate Degree, bachelor, master or higher degree. The job experience variable is equal to age minus the age of ending education. The scrutiny of earning data show that earning-age profiles (for both men and women) are parabolic and concave with to age axis. Also, this result was confirmed by the results of estimating equations based on Mincerian equations because the sign of square of job experience’s variable was negative (for both men and women for all years). The results also show that the variables of education and job experience (learning in practice) both on the dependent variable, namely annual earnings from work have a positive impact, but in most cases the effect of education on earnings was more than twice that of the revenue.