IDEAS home Printed from https://ideas.repec.org/a/bla/labour/v30y2016i3p347-367.html
   My bibliography  Save this article

From Soviet to Europe: Returns to Education Puzzle in Bulgaria

Author

Listed:
  • Anita V. Staneva
  • Hany Abdel-Latif

Abstract

This paper makes a systematic presentation of returns to education in Bulgaria, a country that has witnessed a number of dramatic structural changes over the last two decades. It examines the headway of returns to education for Bulgaria in two obverse economic regimes - from communism to EU membership. The findings show a steady increase in returns to education for both males and females until 2003. The average returns to one additional year of education rose from 1.1% in 1986 to 5.1% in 2003 for males and from 2.1% to 5.9% for females. Quantile regression estimations, between 1986 and 2003, evince that the most prominent increase in the wage premium occurred at the top end of the distribution, where the rate of returns to education, in particular for females increased from a negative and insignificant sign in 1986 to 7% in 2003. However, this increasing trend in returns to education seems to take an inverted-U-shape in 2007, the year when the country joined the EU, which poses a new puzzle to be resolved. To this end, the current paper introduces possible explanations for such a puzzle and sheds lights on a number of insightful policy implications.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Anita V. Staneva & Hany Abdel-Latif, 2016. "From Soviet to Europe: Returns to Education Puzzle in Bulgaria," LABOUR, CEIS, vol. 30(3), pages 347-367, September.
  • Handle: RePEc:bla:labour:v:30:y:2016:i:3:p:347-367
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/labr.12080
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Fersterer, Josef & Winter-Ebmer, Rudolf, 2003. "Are Austrian returns to education falling over time?," Labour Economics, Elsevier, vol. 10(1), pages 73-89, February.
    2. Angel de la Fuente & Juan Francisco Jimeno, 2004. "The private and fiscal returns to schooling and the effect of public policies on private incentives to invest in education: a general framework and some results for the EU," Working Papers 152, Barcelona Graduate School of Economics.
    3. Nora Lustig & Luis F. Lopez-Calva & Eduardo Ortiz-Juarez, 2013. "Deconstructing the Decline in Inequality in Latin America," Working Papers 1314, Tulane University, Department of Economics.
    4. Campos, Nauro F. & Jolliffe, Dean, 2003. "After, before and during: returns to education in Hungary (1986-1998)," Economic Systems, Elsevier, vol. 27(4), pages 377-390, December.
    5. Claudia Olivetti & Barbara Petrongolo, 2008. "Unequal Pay or Unequal Employment? A Cross-Country Analysis of Gender Gaps," Journal of Labor Economics, University of Chicago Press, vol. 26(4), pages 621-654, October.
    6. Andren, Daniela & Earle, John S. & Sapatoru, Dana, 2005. "The wage effects of schooling under socialism and in transition: Evidence from Romania, 1950-2000," Journal of Comparative Economics, Elsevier, vol. 33(2), pages 300-323, June.
    7. Ira N. Gang & Ralitza Dimova, 2004. "Self-Selection And Earnings During Volatile Transition," Departmental Working Papers 200409, Rutgers University, Department of Economics.
    8. Gonzalez, Naihobe & Oyelere, Ruth Uwaifo, 2011. "Are returns to education on the decline in Venezuela and does Mission Sucre have a role to play?," Economics of Education Review, Elsevier, vol. 30(6), pages 1348-1369.
    9. Filer, Randall K. & Jurajda, Stepan & Planovsky, Jan, 1999. "Education and wages in the Czech and Slovak Republics during transition," Labour Economics, Elsevier, vol. 6(4), pages 581-593, November.
    10. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
    11. Jolliffe, Dean, 2002. "The Gender Wage Gap in Bulgaria: A Semiparametric Estimation of Discrimination," Journal of Comparative Economics, Elsevier, vol. 30(2), pages 276-295, June.
    12. Fleisher, Belton M. & Sabirianova, Klara & Wang, Xiaojun, 2005. "Returns to skills and the speed of reforms: Evidence from Central and Eastern Europe, China, and Russia," Journal of Comparative Economics, Elsevier, vol. 33(2), pages 351-370, June.
    13. Claudia Olivetti & Barbara Petrongolo, 2006. "Unequal Pay or Unequal Employment? A Cross-country Analysis of Gender Gaps Risk Premium," Boston University - Department of Economics - Working Papers Series wp2006-013, Boston University - Department of Economics.
    14. Münich, Daniel & Svejnar, Jan & Terrell, Katherine, 2004. "Do Markets Favor Women's Human Capital More than Planners?," IZA Discussion Papers 1393, Institute of Labor Economics (IZA).
    15. Dr Tatiana Fic & Ana Rincon-Aznar & Lucy Stokes & Dawn Holland, 2011. "Labour mobility within the EU," National Institute of Economic and Social Research (NIESR) Discussion Papers 379, National Institute of Economic and Social Research.
    16. Lisa Giddings, 2002. "Changes in gender earnings differentials in Bulgaria's transition to a mixed-market economy," Eastern Economic Journal, Eastern Economic Association, vol. 28(4), pages 481-497, Fall.
    17. Powell, James L., 1986. "Censored regression quantiles," Journal of Econometrics, Elsevier, vol. 32(1), pages 143-155, June.
    18. Louise Fox & Melissa Sekkel Gaal, 2008. "Working Out of Poverty : Job Creation and the Quality of Growth in Africa," World Bank Publications, The World Bank, number 6434, June.
    19. Colm Harmon & Ian Walker & Niels Westergaard-Nielsen, 2001. "Introduction [to Education and earnings in Europe : a cross country analysis of the returns to education]," Open Access publications 10197/757, School of Economics, University College Dublin.
    20. Jan Rutkowski, 1996. "High skills pay off: the changing wage structure during economic transition in Poland," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 4(1), pages 89-112, May.
    21. Laporte, B. & Ringold, D., 1997. "Trends in Education Access and Fanincing During the Transition in Central and Eastern Europe," Papers 361, World Bank - Technical Papers.
    22. Acemoglu, Daron & Autor, David, 2011. "Skills, Tasks and Technologies: Implications for Employment and Earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 12, pages 1043-1171, Elsevier.
    23. Christopher Colclough & Geeta Kingdon & Harry Patrinos, 2010. "The Changing Pattern of Wage Returns to Education and its Implications," Development Policy Review, Overseas Development Institute, vol. 28(6), pages 733-747, November.
    24. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    25. Zhang, Junsen & Zhao, Yaohui & Park, Albert & Song, Xiaoqing, 2005. "Economic returns to schooling in urban China, 1988 to 2001," Journal of Comparative Economics, Elsevier, vol. 33(4), pages 730-752, December.
    26. Flabbi, Luca & Paternostro, Stefano & Tiongson, Erwin R., 2008. "Returns to education in the economic transition: A systematic assessment using comparable data," Economics of Education Review, Elsevier, vol. 27(6), pages 724-740, December.
    27. Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863, Elsevier.
    28. Desjonqueres, Thibaut & Machin, Stephen & Van Reenen, John, 1999. " Another Nail in the Coffin? Or Can the Trade Based Explanation of Changing Skill Structures Be Resurrected?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(4), pages 533-554, December.
    29. Newell, Andrew & Reilly, Barry, 1996. "The gender wage gap in Russia: Some empirical evidence," Labour Economics, Elsevier, vol. 3(3), pages 337-356, October.
    30. Moshe Buchinsky, 1998. "The dynamics of changes in the female wage distribution in the USA: a quantile regression approach," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 13(1), pages 1-30.
    31. Brainerd, Elizabeth, 1998. "Winners and Losers in Russia's Economic Transition," American Economic Review, American Economic Association, vol. 88(5), pages 1094-1116, December.
    32. Azevedo, Joao Pedro & Davalos, Maria Eugenia & Diaz-Bonilla, Carolina & Atuesta, Bernardo & Castaneda, Raul Andres, 2013. "Fifteen years of inequality in Latin America : how have labor markets helped ?," Policy Research Working Paper Series 6384, The World Bank.
    33. Robert S. Chase, 1998. "Markets for Communist Human Capital: Returns to Education and Experience in the Czech Republic and Slovakia," ILR Review, Cornell University, ILR School, vol. 51(3), pages 401-423, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bergbauer, Annika B., 2019. "How did EU membership of Eastern Europe affect student achievement?," EconStor Open Access Articles, ZBW - Leibniz Information Centre for Economics, pages 624-644.
    2. Annika B. Bergbauer, 2019. "How Did EU Membership of Eastern Europe Affect Student Achievement?," ifo Working Paper Series 299, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Martina Mysikova & Jiri Vecernik, 2015. "Returns to education in transition and advanced European countries: The role of an expansion of higher education," Investigaciones de Economía de la Educación volume 10, in: Marta Rahona López & Jennifer Graves (ed.), Investigaciones de Economía de la Educación 10, edition 1, volume 10, chapter 44, pages 865-886, Asociación de Economía de la Educación.
    2. Cui, Yuling & Nahm, Daehoon & Tani, Massimiliano, 2013. "Earnings Differentials and Returns to Education in China, 1995-2008," IZA Discussion Papers 7349, Institute of Labor Economics (IZA).
    3. Yang, Dennis Tao, 2005. "Determinants of schooling returns during transition: Evidence from Chinese cities," Journal of Comparative Economics, Elsevier, vol. 33(2), pages 244-264, June.
    4. Fleisher, Belton M. & Sabirianova, Klara & Wang, Xiaojun, 2005. "Returns to skills and the speed of reforms: Evidence from Central and Eastern Europe, China, and Russia," Journal of Comparative Economics, Elsevier, vol. 33(2), pages 351-370, June.
    5. Brunello, Giorgio & Crivellaro, Elena & Rocco, Lorenzo, 2010. "Lost in Transition? The Returns to Education Acquired under Communism 15 Years after the Fall of the Berlin Wall," IZA Discussion Papers 5409, Institute of Labor Economics (IZA).
    6. Andrén, Daniela & Andrén, Thomas, 2007. "Occupational Gender Composition and Wages in Romania: From Planned Equality to Market Inequality?," IZA Discussion Papers 3152, Institute of Labor Economics (IZA).
    7. Sofia Cheidvasser, 2000. "The Educated Russian's Curse: Returns to Education in the Russian Federation," Econometric Society World Congress 2000 Contributed Papers 0246, Econometric Society.
    8. Lisa Giddings, 2003. "Continued decline for ethnic minorities in the transition?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 11(4), pages 621-648, December.
    9. Gorodnichenko, Yuriy & Sabirianova Peter, Klara, 2005. "Returns to schooling in Russia and Ukraine: A semiparametric approach to cross-country comparative analysis," Journal of Comparative Economics, Elsevier, vol. 33(2), pages 324-350, June.
    10. Hugo Benitez-Silva & Sofia Sheidvasser, 2000. "The Educated Russian's Curse: Returns to Education in the Russian Federation," Department of Economics Working Papers 00-05, Stony Brook University, Department of Economics.
    11. 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.
    12. Andren, Daniela & Earle, John S. & Sapatoru, Dana, 2005. "The wage effects of schooling under socialism and in transition: Evidence from Romania, 1950-2000," Journal of Comparative Economics, Elsevier, vol. 33(2), pages 300-323, June.
    13. 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.
    14. Lili Kang & Fei Peng, 2012. "A selection analysis of returns to education in China," Post-Communist Economies, Taylor & Francis Journals, vol. 24(4), pages 535-554, March.
    15. Martins, Pedro S. & Pereira, Pedro T., 2004. "Does education reduce wage inequality? Quantile regression evidence from 16 countries," Labour Economics, Elsevier, vol. 11(3), pages 355-371, June.
    16. Flabbi, Luca & Paternostro, Stefano & Tiongson, Erwin R., 2008. "Returns to education in the economic transition: A systematic assessment using comparable data," Economics of Education Review, Elsevier, vol. 27(6), pages 724-740, December.
    17. Chzhen, Yekaterina & Mumford, Karen, 2011. "Gender gaps across the earnings distribution for full-time employees in Britain: Allowing for sample selection," Labour Economics, Elsevier, vol. 18(6), pages 837-844.
    18. Penka Kovacheva, 2011. "Human capital and wage inequality during transition: evidence from Bulgaria," Post-Communist Economies, Taylor & Francis Journals, vol. 23(2), pages 237-255.
    19. Seneviratne, Prathi, 2020. "Gender wage inequality during Sri Lanka’s post-reform growth: A distributional analysis," World Development, Elsevier, vol. 129(C).
    20. repec:ilo:ilowps:487581 is not listed on IDEAS
    21. Wyrwich, Michael, 2013. "Can socioeconomic heritage produce a lost generation with regard to entrepreneurship?," Journal of Business Venturing, Elsevier, vol. 28(5), pages 667-682.

    More about this item

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:labour:v:30:y:2016:i:3:p:347-367. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley Content Delivery). General contact details of provider: http://edirc.repec.org/data/csrotit.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.