It is interesting to note that although there are significant differences in compensation for workers across the employer size, yet the age earnings profiles
follow the life-cycle pattern in both categories where income increases with age for some time, reaches at the peak and then declines.
To get an indication of how much the age earnings profiles changed between 1979 and 1989, we predict earnings for each education, year and sex group for each year of age from age 20 to age 70.
A simple comparison of how the age earnings profiles have changed can be seen by examining the sum of earnings from age 20 to age 70.
Estimating the earnings equation by gender will allow for gender differences in age earnings profiles
The age earnings profiles
based on the estimates of earnings functions indicate that earnings are increasing functions of education and one of the main causes of inequality in the personal earnings.
Moreover, the age earnings profiles
for different education groups follow the usual concave shape, showing a decline in earnings after the prime earnings age.