The effect of education on income

Abstract: Abstract This paper is about the effect of education on income. In the last two decades the real wages has increased a lot, and so has the amount of people with a higher education. This paper focus is to investigate the relationship between education and income. Other variables that might have an impact on the results will also be considered, such as experience in form of age, immigration, and employment. The reasons why these variables are included is because in one way or another these variables have a direct effect on the wage level. The foundation of this thesis regressions is based on the mincer equation, we will use aggregated data in all of Sweden’s 290 municipalities for the regressions. The results from running these regressions is what we hoped to find, we can safely conclude that there is a positive and significant relationship between wages and education. On the other hand, we cannot safely say that there is a significant relationship with the other variables that where included such as immigration, experience, and employment. The optimal outcome from our regressions is to have a high school education consisting of 3 years and a college education of 3 years. This will result in the highest wage for the future