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Self-Selection And Earnings During Volatile Transition

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  • Ralitza Dimova

    ()

  • Ira N. Gang

    ()

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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File URL: http://www.wdi.umich.edu/files/Publications/WorkingPapers/wp699.pdf
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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 2004-699.

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Length: 24 pages
Date of creation: 01 May 2004
Date of revision:
Handle: RePEc:wdi:papers:2004-699

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Keywords: employment selection; earnings; Bulgaria;

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References

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  1. Jennifer Hunt, 2002. "The Transition in East Germany: When Is a Ten-Point Fall in the Gender Wage Gap Bad News?," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 20(1), pages 148-169, January.
  2. Aghion, P. & Blanchard, O.J., 1993. "On the Speed of Transition in Central Europe," Working papers, Massachusetts Institute of Technology (MIT), Department of Economics 93-8, Massachusetts Institute of Technology (MIT), Department of Economics.
  3. I Beleva & Richard Jackman & M Nenova-Amar, 1995. "The Labour Market in Bulgaria," CEP Discussion Papers, Centre for Economic Performance, LSE dp0268, Centre for Economic Performance, LSE.
  4. Falaris, Evangelos M., 2004. "Private and public sector wages in Bulgaria," Journal of Comparative Economics, Elsevier, vol. 32(1), pages 56-72, March.
  5. 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, Elsevier, vol. 37(Supplemen), pages 345-360.
  6. Tito Boeri & Katherine Terrell, 2002. "Institutional Determinants of Labor Reallocation in Transition," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 16(1), pages 51-76, Winter.
  7. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
  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. Catherine Y. Co & Ira N. Gang & Myeong-Su Yun, 2005. "Self-Employment and Wage Earning in Hungary," Review of Development Economics, Wiley Blackwell, Wiley Blackwell, vol. 9(2), pages 150-165, 05.
  10. 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.
  11. Dean Jolliffe, 2001. "The Gender Wage Gap in Bulgaria: A Semiparametric Estimation of Discrimination," William Davidson Institute Working Papers Series, William Davidson Institute at the University of Michigan 401, William Davidson Institute at the University of Michigan.
  12. 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, Elsevier, vol. 7(5), pages 575-601, September.
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Citations

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Cited by:
  1. Ilhom Abdulloev & Ira N. Gang & John Landon-Lane, 2011. "Migration as a Substitute for Informal Activities: Evidence from Tajikistan," Working Papers, Institut für Ost- und Südosteuropaforschung (Institute for East and South-East European Studies) 311, Institut für Ost- und Südosteuropaforschung (Institute for East and South-East European Studies).
  2. Dimova, Ralitza & Gang, Ira N. & Landon-Lane, John, 2011. "Revealed Informal Activity," IZA Discussion Papers 5607, Institute for the Study of Labor (IZA).
  3. 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, Centre for Economic Development and Institutions(CEDI), Brunel University 06-07, Centre for Economic Development and Institutions(CEDI), Brunel University.
  4. Penka Kovacheva, 2011. "Human capital and wage inequality during transition: evidence from Bulgaria," Post-Communist Economies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 23(2), pages 237-255.
  5. 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, Elsevier, vol. 35(3), pages 378-389, September.
  6. Bhaumik, Sumon Kumar & Gang, Ira N. & Yun, Myeong-Su, 2006. "Ethnic conflict and economic disparity: Serbians and Albanians in Kosovo," Journal of Comparative Economics, Elsevier, vol. 34(4), pages 754-773, December.
  7. Sumon Bhaumik & Ira Gang & Myeong-Su Yun, 2005. "Ethnic Conflict and Economic Disparity: Serbians & Albanians in Kosovo," William Davidson Institute Working Papers Series, William Davidson Institute at the University of Michigan wp808, William Davidson Institute at the University of Michigan.
  8. Sumon Kumar Bhaumik & Ira N. Gang & Myeong-Su Yun, 2006. "A note on poverty in Kosovo," Journal of International Development, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 18(8), pages 1177-1187.

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