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Do Markets Favor Women's Human Capital More than Planners?

  • Münich, Daniel



  • Svejnar, Jan


    (Columbia University)

  • Terrell, Katherine

    (University of Michigan)

Using micro data on women in the Czech Republic, we compare returns to various measures of human capital at the end of communism (1989), in mid-transition (1996) and in late/posttransition (2002). We show: dramatic increases in returns to education from 1989 to 1996 but no change from 1996 to 2002; no differences in returns to education by state vs. privatelyowned firms; "sheepskin" effects in both regimes, which rise over time and are similar across firm ownership; no difference in returns to education obtained during communism vs. transition; no change in wage-experience profiles over time; and similar increases in returns to education for women and men. In sum, markets pay women and men equally more for their human capital than the planners did; all the adjustment occurred in early transition and was driven by market forces rather than private ownership.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1393.

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Length: 35 pages
Date of creation: Nov 2004
Date of revision:
Publication status: published in: Journal of Comparative Economics, 2005, 33 (2), 278-298
Handle: RePEc:iza:izadps:dp1393
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  1. Vera A. Adamchik & Arjun S. Bedi, 2003. "Gender pay differentials during the transition in Poland," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 11(4), pages 697-726, December.
  2. Elizabeth Brainerd, 2000. "Women in Transition: Changes in Gender Wage Differentials in Eastern Europe and the Former Soviet Union," ILR Review, Cornell University, ILR School, vol. 54(1), pages 138-162, October.
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  5. 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.
  6. Puhani, Patrick A, 2000. " The Heckman Correction for Sample Selection and Its Critique," Journal of Economic Surveys, Wiley Blackwell, vol. 14(1), pages 53-68, February.
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  8. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-61, January.
  9. Layard, Richard & Psacharopoulos, George, 1974. "The Screening Hypothesis and the Returns to Education," Journal of Political Economy, University of Chicago Press, vol. 82(5), pages 985-98, Sept./Oct.
  10. 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.
  11. Krueger, Alan B. & Pischke, Jörn-Steffen, 1992. "A comparative analysis of East and West German labor markets before and after unification," ZEW Discussion Papers 92-11, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  12. Psacharopoulos, George, 1994. "Returns to investment in education: A global update," World Development, Elsevier, vol. 22(9), pages 1325-1343, September.
  13. Constantin G. Ogloblin, 1999. "The Gender earnings differential in the Russian transition economy," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 52(4), pages 602-627, July.
  14. Hungerford, Thomas & Solon, Gary, 1987. "Sheepskin Effects in the Returns to Education," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 175-77, February.
  15. 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.
  16. Jurajda, Stepan, 2003. "Gender wage gap and segregation in enterprises and the public sector in late transition countries," Journal of Comparative Economics, Elsevier, vol. 31(2), pages 199-222, June.
  17. James Heckman & Anne Layne-Farrar & Petra Todd, 1995. "Does Measured School Quality Really Matter? An Examination of the Earnings-Quality Relationship," NBER Working Papers 5274, National Bureau of Economic Research, Inc.
  18. Jaeger, David A & Page, Marianne E, 1996. "Degrees Matter: New Evidence on Sheepskin Effects in the Returns to Education," The Review of Economics and Statistics, MIT Press, vol. 78(4), pages 733-40, November.
  19. Constantin G. Ogloblin, 1999. "The Gender Earnings Differential in the Russian Transition Economy," ILR Review, Cornell University, ILR School, vol. 52(4), pages 602-627, July.
  20. Flanagan, Robert J., 1998. "Were communists good human capitalists? The case of the Czech Republic," Labour Economics, Elsevier, vol. 5(3), pages 295-312, September.
  21. Orazem, Peter F. & Vodopivec, Milan, 1997. "Value of human capital in transition to market: Evidence from Slovenia," European Economic Review, Elsevier, vol. 41(3-5), pages 893-903, April.
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