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Assessing the Problem of Human Capital Mismatch in Transition Economies

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  • Viliam Druska
  • Byeong ju Jeong
  • Michal Kejak
  • Viatcheslav Vinogradov

Abstract

In transition economies, there may be a significant mismatch between the types of skills that workers possess and the types of skills that the new economy demands. We consider this problem of human capital mismatch along the dimensions of training type (holding the level) and occupation. We document that in the Czech Republic and Poland the wage rate grew faster in business occupations than in technical occupations in the 1990's, and that in response the technical training/occupations contracted while the business training/occupations expanded. We do not find this pattern in Hungary. We construct a neoclassical model with endogenous occupational choice and calibrate it to the Czech and Polish data. We estimate that the discounted sum of output loss due to human capital mismatch amounts to 44% of the aggregate output of the beginning year of transition.

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Bibliographic Info

Paper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number 467.

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Length: 36 pages
Date of creation: 01 Mar 2002
Date of revision:
Handle: RePEc:wdi:papers:2002-467

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Keywords: human capital; mismatch; occupation; training;

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References

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  1. Acemoglu, D. & Zilibotti, F., 1998. "Productivity Differences," Papers, Stockholm - International Economic Studies 660, Stockholm - International Economic Studies.
  2. Vit Sorm & Katherine Terrell, 1999. "Sectoral Restructuring and Labor Mobility: A Comparative Look at the Czech Republic," William Davidson Institute Working Papers Series, William Davidson Institute at the University of Michigan 273, William Davidson Institute at the University of Michigan.
  3. Klara Z. Sabirianova, 2000. "The Great Human Capital Reallocation: An Empirical Analysis of Occupational Mobility in Transitional Russia," William Davidson Institute Working Papers Series, William Davidson Institute at the University of Michigan 309, William Davidson Institute at the University of Michigan.
  4. Tito Boeri & Christopher Flinn, 1997. "Returns to Mobility in the transition to a Market Economy," William Davidson Institute Working Papers Series, William Davidson Institute at the University of Michigan 108, William Davidson Institute at the University of Michigan.
  5. Barro, Robert J & Lee, Jong Wha, 1996. "International Measures of Schooling Years and Schooling Quality," American Economic Review, American Economic Association, American Economic Association, vol. 86(2), pages 218-23, May.
  6. Alfonso Alba-Ramírez, 1993. "Mismatch in the Spanish Labor Market: Overeducation?," Journal of Human Resources, University of Wisconsin Press, vol. 28(2), pages 259-278.
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Cited by:
  1. Zuzana Brixiova & Vera Volchok, 2005. "Labor Market Trends and Institutions in Belarus," William Davidson Institute Working Papers Series, William Davidson Institute at the University of Michigan wp777, William Davidson Institute at the University of Michigan.
  2. Spagat, Michael, 2006. "Human capital and the future of transition economies," Journal of Comparative Economics, Elsevier, vol. 34(1), pages 44-56, March.
  3. Irina Soboleva, 2011. "Patterns of Human Capital Development in Russia: Meeting the Challenge of Market Reforms and Globalization," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, Faculty of Economics and Administration, University of Malaya, vol. 3(2), pages 235-257, July.
  4. Kevin Denny & Patrick Orla Doyle, 2005. "Returns to basic skills in Central and Eastern Europe - a semi-parametric approach," Working Papers, School Of Economics, University College Dublin 200507, School Of Economics, University College Dublin.

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