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Self-Selection and Earnings During Volatile Transition

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Author Info

  • Dimova, Ralitza

    ()
    (University of Manchester)

  • Gang, Ira N.

    ()
    (Rutgers University)

Abstract

Using Bulgarian Integrated Household Surveys for 1995, 1997 and 2001 this paper explores determinants of labor force status – not working, public sector employment, private sector employment and self-employment – and earnings for each of the three employment sectors. We find that while skilled labor’s pattern of reallocation into the public sector remains roughly the same over time, the inflow of highly educated laborers into the private sector and selfemployment increases. These changes coincide with the erosion of the returns to observed skills in the private sector and self-employment, while the public sector continues to reward all types of education at higher than the elementary level.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1158.

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Length: 25 pages
Date of creation: May 2004
Date of revision:
Publication status: published in: Journal of Comparative Economics, 2007, 35 (3), 612-629
Handle: RePEc:iza:izadps:dp1158

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Keywords: earnings; employment selection; Bulgaria;

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References

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  1. Earle, John S. & Sakova, Zuzana, 2000. "Business start-ups or disguised unemployment? Evidence on the character of self-employment from transition economies," Labour Economics, Elsevier, vol. 7(5), pages 575-601, September.
  2. Edward J. Bird & Johannes Schwarze & Gert Wagner, 1994. "Wage effects of the move toward free markets in East Germany," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 47(3), pages 390-400, April.
  3. I Beleva & Richard Jackman & M Nenova-Amar, 1995. "The Labour Market in Bulgaria," CEP Discussion Papers dp0268, Centre for Economic Performance, LSE.
  4. Tito Boeri & Katherine Terrell, 2002. "Institutional Determinants of Labor Reallocation in Transition," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 51-76, Winter.
  5. Dean Jolliffe, 2001. "The Gender Wage Gap in Bulgaria: A Semiparametric Estimation of Discrimination," William Davidson Institute Working Papers Series 401, William Davidson Institute at the University of Michigan.
  6. Blanchard, Olivier Jean & Aghion, Philippe, 1994. "On the Speed of Transition in Central Europe," Scholarly Articles 4481322, Harvard University Department of Economics.
  7. Hunt, Jennifer, 1998. "The Transition in East Germany: When is a Ten Point Fall in the Gender Wage Gap Bad News?," CEPR Discussion Papers 1805, C.E.P.R. Discussion Papers.
  8. Robert S. Chase, 1998. "Markets for communist human capital: Returns to education and experience in the Czech republic and Slovakia," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 51(3), pages 401-423, April.
  9. Gang, Ira N. & Stuart, Robert C., 1997. "What difference does a country make? Earnings by Soviets in the Soviet Union and in the United States," The Quarterly Review of Economics and Finance, Elsevier, vol. 37(Supplemen), pages 345-360.
  10. Falaris, Evangelos M., 2004. "Private and public sector wages in Bulgaria," Journal of Comparative Economics, Elsevier, vol. 32(1), pages 56-72, March.
  11. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
  12. Catherine Y. Co & Ira N. Gang & Myeong-Su Yun, 2005. "Self-Employment and Wage Earning in Hungary," Review of Development Economics, Wiley Blackwell, vol. 9(2), pages 150-165, 05.
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Citations

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Cited by:
  1. Abdulloev, Ilhom & Gang, Ira N. & Landon-Lane, John, 2011. "Migration as a Substitute for Informal Activities: Evidence from Tajikistan," IZA Discussion Papers 6236, Institute for the Study of Labor (IZA).
  2. Sumon Kumar Bhaumik & Ira N. Gang & Myeong-Su Yun, 2006. "A note on poverty in Kosovo," Journal of International Development, John Wiley & Sons, Ltd., vol. 18(8), pages 1177-1187.
  3. Sumon Bhaumik & Ira Gang & Myeong-Su Yun, 2005. "Ethnic Conflict and Economic Disparity: Serbians & Albanians in Kosovo," William Davidson Institute Working Papers Series wp808, William Davidson Institute at the University of Michigan.
  4. Ralitza Dimova & Ira N. Gang & John Landon-Lane, 2011. "Revealed Informal Activity," Working Papers 296, Institut für Ost- und Südosteuropaforschung (Institute for East and South-East European Studies).
  5. Sumon Kumar Bhaumik & Ralitza Dimova & Jeffrey B. Nugent, 2006. "Pulls, Pushes and Entitlement Failures in Labor Markets: Does the State of Development Matter?," CEDI Discussion Paper Series 06-07, Centre for Economic Development and Institutions(CEDI), Brunel University.
  6. Penka Kovacheva, 2011. "Human capital and wage inequality during transition: evidence from Bulgaria," Post-Communist Economies, Taylor & Francis Journals, vol. 23(2), pages 237-255.
  7. Bhaumik, Sumon Kumar & Dimova, Ralitza & Nugent, Jeffrey B., 2011. "Off-farm labor supply and labor markets in rapidly changing circumstances: Bulgaria during transition," Economic Systems, Elsevier, vol. 35(3), pages 378-389, September.
  8. Sumon Kumar Bhaumik & Ira N. Gang & Myeong-Su Yun, 2006. "Ethnic Conflict and Economic Disparity: Serbians and Albanians in Kosovo," Departmental Working Papers 200636, Rutgers University, Department of Economics.

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