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

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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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  • Daniela Andren & John S. Earle & Dana Sapatoru, "undated". "The Wage Effects of Schooling under Socialism and in Transition: Evidence from Romania, 1950-2000," Upjohn Working Papers jse20051, W.E. Upjohn Institute for Employment Research.
    • Handle: RePEc:upj:weupjo:jse20051
    Note: Appears in Journal of Comparative Economics 33(2): 300-323
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    More about this item

    Keywords

    transition economies; job creation; firm-level data;
    All these keywords.

    JEL classification:

    • P2 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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