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Education in Romania - How much is it Worth?

Author

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  • Ion Zgreaban, Irina

    () (Bucharest University of Economics)

Abstract

This paper aims at estimating the impact of education on individual earnings through the econometric modeling of secondary data, for the year 2009 in Romania. The national representative sample used includes 16,570 statistical observations. Surprisingly, the largest impact on Romania’s income is determined by gender. Male income (log) is 26.58% higher than that of females, although data shows, that, on average, women in the sample have more years of education than men. This shows a highly discriminatory phenomenon, which can be solved probably by educational and awareness raising programs, aimed at combating gender-based (wage) discrimination. As regards to the importance of education as a determinant of earnings, we conclude that it is a key determinant of individual income. If in 1995 the coefficient of the variable “years of education” was -0.0019 and in 2000 0.0061, in 2009 it was, according to this study, 0.081652. It shows that in Romania the importance of education has increased, and consequently, the importance of people's knowledge and skills in their wage level, has soared too, which, in turn, may be an indicator of the transformation of Romania into a knowledge based society.

Suggested Citation

  • Ion Zgreaban, Irina, 2013. "Education in Romania - How much is it Worth?," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(1), pages 149-163, March.
  • Handle: RePEc:rjr:romjef:v::y:2013:i:1:p:149-163
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    References listed on IDEAS

    as
    1. Mikael Lindahl & Alan B. Krueger, 2001. "Education for Growth: Why and for Whom?," Journal of Economic Literature, American Economic Association, pages 1101-1136.
    2. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters,in: Schooling, Experience, and Earnings, pages 1-4 National Bureau of Economic Research, Inc.
    3. Heckman, James J. & Lochner, Lance J. & Todd, Petra E., 2006. "Earnings Functions, Rates of Return and Treatment Effects: The Mincer Equation and Beyond," Handbook of the Economics of Education, Elsevier.
    4. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, January.
    5. James M. Poterba & Kim S. Rueben, 1994. "The Distribution of Public Sector Wage Premia: New Evidence Using Quantile Regression Methods," NBER Working Papers 4734, National Bureau of Economic Research, Inc.
    6. Joshua Angrist & Victor Chernozhukov & Iván Fernández-Val, 2006. "Quantile Regression under Misspecification, with an Application to the U.S. Wage Structure," Econometrica, Econometric Society, vol. 74(2), pages 539-563, March.
    7. Blaise Melly, 2005. "Public-private sector wage differentials in Germany: Evidence from quantile regression," Empirical Economics, Springer, pages 505-520.
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    More about this item

    Keywords

    wages differential; education; gender discrimination; Mincer;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J7 - Labor and Demographic Economics - - Labor Discrimination
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling

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