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The Wage Effects of Schooling under Socialism and in Transition: Evidence from Romania, 1950-2000

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Author Info
Daniela Andren (University of Gothenborg)
John S. Earle () (W.E. Upjohn Institute for Employment Research and Central European University)
Dana Sapatoru (W.E. Upjohn Institute for Employment Research)

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Abstract

We estimate the impact of schooling on monthly earnings from 1950 to 2000 in Romania. Nearly constant at about 3-4 percent during the socialist period, the coefficient on schooling in a conventional earnings regression rises steadily during the 1990s, reaching 8.5 percent by 2000. Our analysis finds little evidence for either the standard explanations of such an increase in the West (labor supply movements, product demand shifts, technical change) or the transition-specific accounts sometimes offered (wage liberalization, border opening, increased quality of education). But we find some support for institutional and organizational explanations, particularly the high productivity of education in restructuring and entrepreneurial activities in a disequilibrium environment.

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Paper provided by W.E. Upjohn Institute for Employment Research in its series Staff Working Papers with number 04-108.

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Date of creation: Nov 2004
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Handle: RePEc:upj:weupjo:04-108

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Related research
Keywords: returns to schooling; human capital; education; wage differentials; transition; Romania;

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Find related papers by JEL classification:
I20 - Health, Education, and Welfare - - Education - - - General
J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
P23 - Economic Systems - - Socialist Systems and Transition Economies - - - Factor and Product Markets; Industry Studies; Population
P31 - Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions

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  3. Earle, John S. & Telegdy, Almos, 2002. "Privatization Methods and Productivity Effects in Romanian Industrial Enterprises," Journal of Comparative Economics, Elsevier, vol. 30(4), pages 657-682, December. [Downloadable!] (restricted)
    Other versions:
  4. John S. Earle & Ugo Pagano & Maria Lesi, 2002. "Information Technology, Organizational Form, and Transition to the Market," Staff Working Papers 02-82, W.E. Upjohn Institute for Employment Research. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Orlowski, Robert & Riphahn, Regina T., 2008. "The East German Wage Structure after Transition," IZA Discussion Papers 3861, Institute for the Study of Labor (IZA). [Downloadable!]
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