On aggregating human capital across heterogeneous cohorts

•Mincerian log-linear relation between human capital, years of schooling, experience.•We assume that the relation holds at micro level and study it upon aggregation.•The exact relation is lost upon aggregation, except under implausible demographics.•Numerically, the macro-Mincer equation is a good approximation of the true relation.•We allow heterogeneity in years of schooling, retirement age and demographics.

This paper studies the question: Can the microeconomic Mincerian (log-linear) functional relationship between human capital, years of schooling and work experience be recovered in some similar form at the macroeconomic level? A large macroeconomic literature assumes so, warranting that the question is of interest. We first examine the question at a theoretical level and find that except under very special assumptions, the answer is in the negative. On the other hand, we also show numerically that a macro-Mincer relationship can nevertheless be perceived as a quantitatively reasonable approximation of the theoretically derived “true” relationship, at least if the observed heterogeneity comes only from differences in the number of years of schooling, retirement age, or demographic survival laws.