Returns to Education in the Economic Transition: A Systematic Assessment Using Comparable Data

This paper studies a sample of economies in transition to verify the assertion that returns to schooling increase as an economy transitions to a market environment. This claim has been difficult to assess in the past as the empirical evidence so far has covered only a few countries over short time p...

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Main Authors:	Flabbi, Luca, Paternostro, Stefano, Tiongson, Erwin R.
Format:	Journal Article
Language:	EN
Published:	2012
Subjects:	Analysis of Education I210 Human Capital Skills Occupational Choice Labor Productivity J240 Socialist Systems and Transitional Economies: Factor and Product Markets Industry Studies Population P230 Socialist Institutions and Their Transitions: Consumer Economics Health Education and Training: Welfare, Income, Wealth, and Poverty P360
Online Access:	http://hdl.handle.net/10986/5743

id	okr-10986-5743
recordtype	oai_dc
spelling	okr-10986-57432021-04-23T14:02:23Z Returns to Education in the Economic Transition: A Systematic Assessment Using Comparable Data Flabbi, Luca Paternostro, Stefano Tiongson, Erwin R. Analysis of Education I210 Human Capital Skills Occupational Choice Labor Productivity J240 Socialist Systems and Transitional Economies: Factor and Product Markets Industry Studies Population P230 Socialist Institutions and Their Transitions: Consumer Economics Health Education and Training: Welfare, Income, Wealth, and Poverty P360 This paper studies a sample of economies in transition to verify the assertion that returns to schooling increase as an economy transitions to a market environment. This claim has been difficult to assess in the past as the empirical evidence so far has covered only a few countries over short time periods. A number of studies find that returns to education increased from the "pre-transition" period to the "early transition" period; it is not clear what has happened to the skills premium through the late 1990s, or the period thereafter. We implement a more systematic analysis using data comparable across countries and over time to estimate returns to schooling in eight transition economies (Bulgaria, Czech Republic, Hungary, Latvia, Poland, Russia, Slovak Republic, and Slovenia). The analysis covers the early transition period up to 2002; in the case of Hungary, we capture the transition process more fully, beginning in the late 1980s. Compared to the existing literature, we also implement more comprehensive robustness checks on the estimated returns, although at best we offer only an incomplete solution to the problem of endogeneity. We find that the evidence of a rising trend in returns to schooling over the transition period is weak. There are, however, significant differences in returns across countries. These differentials have remained roughly constant over the last 15 years. We speculate on the likely institutional and structural factors underpinning these results. 2012-03-30T07:34:19Z 2012-03-30T07:34:19Z 2008 Journal Article Economics of Education Review 02727757 http://hdl.handle.net/10986/5743 EN http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Journal Article Europe and Central Asia
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	EN
topic	Analysis of Education I210 Human Capital Skills Occupational Choice Labor Productivity J240 Socialist Systems and Transitional Economies: Factor and Product Markets Industry Studies Population P230 Socialist Institutions and Their Transitions: Consumer Economics Health Education and Training: Welfare, Income, Wealth, and Poverty P360
spellingShingle	Analysis of Education I210 Human Capital Skills Occupational Choice Labor Productivity J240 Socialist Systems and Transitional Economies: Factor and Product Markets Industry Studies Population P230 Socialist Institutions and Their Transitions: Consumer Economics Health Education and Training: Welfare, Income, Wealth, and Poverty P360 Flabbi, Luca Paternostro, Stefano Tiongson, Erwin R. Returns to Education in the Economic Transition: A Systematic Assessment Using Comparable Data
geographic_facet	Europe and Central Asia
relation	http://creativecommons.org/licenses/by-nc-nd/3.0/igo
description	This paper studies a sample of economies in transition to verify the assertion that returns to schooling increase as an economy transitions to a market environment. This claim has been difficult to assess in the past as the empirical evidence so far has covered only a few countries over short time periods. A number of studies find that returns to education increased from the "pre-transition" period to the "early transition" period; it is not clear what has happened to the skills premium through the late 1990s, or the period thereafter. We implement a more systematic analysis using data comparable across countries and over time to estimate returns to schooling in eight transition economies (Bulgaria, Czech Republic, Hungary, Latvia, Poland, Russia, Slovak Republic, and Slovenia). The analysis covers the early transition period up to 2002; in the case of Hungary, we capture the transition process more fully, beginning in the late 1980s. Compared to the existing literature, we also implement more comprehensive robustness checks on the estimated returns, although at best we offer only an incomplete solution to the problem of endogeneity. We find that the evidence of a rising trend in returns to schooling over the transition period is weak. There are, however, significant differences in returns across countries. These differentials have remained roughly constant over the last 15 years. We speculate on the likely institutional and structural factors underpinning these results.
format	Journal Article
author	Flabbi, Luca Paternostro, Stefano Tiongson, Erwin R.
author_facet	Flabbi, Luca Paternostro, Stefano Tiongson, Erwin R.
author_sort	Flabbi, Luca
title	Returns to Education in the Economic Transition: A Systematic Assessment Using Comparable Data
title_short	Returns to Education in the Economic Transition: A Systematic Assessment Using Comparable Data
title_full	Returns to Education in the Economic Transition: A Systematic Assessment Using Comparable Data
title_fullStr	Returns to Education in the Economic Transition: A Systematic Assessment Using Comparable Data
title_full_unstemmed	Returns to Education in the Economic Transition: A Systematic Assessment Using Comparable Data
title_sort	returns to education in the economic transition: a systematic assessment using comparable data
publishDate	2012
url	http://hdl.handle.net/10986/5743
_version_	1764396149331984384

Returns to Education in the Economic Transition: A Systematic Assessment Using Comparable Data

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