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Human capital and wage inequality during transition: evidence from Bulgaria

  • Penka Kovacheva
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    This article examines changes in human capital returns and their impact on wage inequality during Bulgaria's transition to a market economy. Using household data spanning the transition period 1995-2003, I find that returns to human capital differ by age. Returns to experience are low as the market economy devalues experience acquired pre-1990. Returns to education also start low but increase over time. This increase is driven by young cohorts receiving higher returns for education acquired post-1990 and middle-aged cohorts receiving higher returns over time. I estimate that these rising returns account for over 77% of the growth in wage inequality.

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    File URL: http://www.tandfonline.com/doi/abs/10.1080/14631377.2011.570052
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    Article provided by Taylor & Francis Journals in its journal Post-Communist Economies.

    Volume (Year): 23 (2011)
    Issue (Month): 2 ()
    Pages: 237-255

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    Handle: RePEc:taf:pocoec:v:23:y:2011:i:2:p:237-255
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