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Earnings, Schooling, and Economic Reform: Econometric Evidence From Hungary (1986--2004)

  • Dean Jolliffe

How does the relationship between earnings and schooling change with the introduction of comprehensive economic reform? This article sheds light on this question using a unique data set and procedure to reduce sample-selection bias. The evidence is from consistently coded, nonretrospective data for about 4 million Hungarian wage earners. Returns to skill increased 75 percent from 1986 to 2004 (that is, during the period stretching from communism to full membership in the European Union). The winners were those with a college or university education and those employed in the services sector (which here excludes those in public services). The reform losers were those in construction and agriculture, those with only a primary or vocational education (who experienced a decline in returns to their education), and younger workers who acquired most of their education after the main reforms were in place. Copyright The Author 2007. Published by Oxford University Press on behalf of the International Bank for Reconstruction and Development / the world bank . All rights reserved. For permissions, please e-mail: journals.permissions@oxfordjournals.org, Oxford University Press.

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File URL: http://hdl.handle.net/10.1093/wber/lhm012
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Article provided by World Bank Group in its journal The World Bank Economic Review.

Volume (Year): 21 (2007)
Issue (Month): 3 (July)
Pages: 509-526

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Handle: RePEc:oup:wbecrv:v:21:y:2007:i:3:p:509-526
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  1. Jennifer Hunt, 1997. "The Transition in East Germany: When is a Ten Point Fall in the Gender Wage Gap Bad News?," Discussion Papers of DIW Berlin 156, DIW Berlin, German Institute for Economic Research.
  2. Campos, Nauro F & Horváth, Roman, 2006. "Reform Redux: Measurement, Determinants and Reversals," IZA Discussion Papers 2093, Institute for the Study of Labor (IZA).
  3. Dean Jolliffe & Nauro F. Campos, 2004. "Does Market Liberalisation Reduce Gender Discrimination? Econometric Evidence from Hungary, 1986—1998," William Davidson Institute Working Papers Series 2004-678, William Davidson Institute at the University of Michigan.
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