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This research examines the relationship between educational attainment and earnings in the context of human capital theory in the urban regions of Iran in(2003-2004). using a sample of 12636 male and female workers clustered within 28 provinces, multilevel statistical techniques was employed to evalute the contribution of education to earnings. Applying a multilevel method of analysis for investigating of the above relationship is the advantages of this paper.
The multilevel analysis showed that data used are affected(a little) by a hierarchical of clustered, and the relationship between human capital variables and earnings varies(a little) across the proviences.By treating individual province as a second level units of analysis, it has been shown that the rate of the differences in the earnings can be attributed to the provinces in which individuals are working.
According this study,in the Iranian urban area, the levels of education, the experience in terms of years and gender of employees is significantly associated with their earnings.
JEL Classification: C39, D33.