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Returns to basic skills in central and eastern Europe

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  • Kevin Denny
  • Orla Doyle

Abstract

This article uses semi-parametric econometric techniques to investigate the relationship between basic skills and earnings in three post-communist countries: the Czech Republic, Hungary and Slovenia, using the International Adult Literacy Survey dataset. It finds that including a measure of basic skills in a Mincer model reduces the returns to education. In addition, using a partially linear model, in which log earnings is linear in education but is an arbitrary function of basic skills, it finds that this relationship is not well described by the common assumption of linearity at the tails of the distribution. Copyright (c) 2010 The Authors. Journal compilation (c) 2010 The European Bank for Reconstruction and Development.

Suggested Citation

  • Kevin Denny & Orla Doyle, 2010. "Returns to basic skills in central and eastern Europe," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 18(1), pages 183-208, January.
  • Handle: RePEc:bla:etrans:v:18:y:2010:i:1:p:183-208
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    Cited by:

    1. Aline Branche-Seigeot, 2013. "La valorisation des compétences de base sur le marché du travail français," Post-Print halshs-00794385, HAL.
    2. Antoni, Manfred & Heineck, Guido, 2012. "Do literacy and numeracy pay off? : on the relationship between basic skills and earnings," IAB Discussion Paper 201221, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. Giorgio Brunello & Elena Crivellaro & Lorenzo Rocco, 2012. "Lost in transition?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 20(4), pages 637-676, October.
    4. Joanna Tyrowicz & Lucas van der Velde, 2017. "When the opportunity knocks: large structural shocks and gender wage gaps," GRAPE Working Papers 2, GRAPE Group for Research in Applied Economics.

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