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Private Returns to Human Capital over Transition: A Case Study of Belarus

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  • Pastore, Francesco

    () (Università della Campania Luigi Vanvitelli)

  • Verashchagina, Alina

    () (Marche Polytechnic University)

Abstract

The gradualist approach to economic transition in Belarus would contribute to form the a priori expectation that the rate of return to education is low and the earnings profile by work experience flat, like they supposedly were under central-planning. However, the first available estimates of Mincerian earnings equations based on the Belarusian Household Survey on Incomes and Expenditure suggest that the skill payoff was high in 1996, at about 10.1% per year, and stable. The return to one year of work experience is also high at 5%. This result maintains also after controlling for sample selection bias, despite a general reduction in the annual rate of return to education by about 20-30%. Though, it is ambiguous whether the high-skill payoff is the consequence of market forces coming into play or of policy decisions, considering the pervasive role of the state in the process of wage determination.

Suggested Citation

  • Pastore, Francesco & Verashchagina, Alina, 2004. "Private Returns to Human Capital over Transition: A Case Study of Belarus," IZA Discussion Papers 1409, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp1409
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    Cited by:

    1. Maksim Yemelyanau, 2009. "Inequality in Belarus from 1995 to 2007," BEROC Working Paper Series 01, Belarusian Economic Research and Outreach Center (BEROC).
    2. Tjaša Bartolj & Aleš AhCan & Aljoša Feldin & Sašo Polanec, 2013. "Evolution of private returns to tertiary education during transition: evidence from Slovenia," Post-Communist Economies, Taylor & Francis Journals, vol. 25(3), pages 407-424, September.
    3. repec:spr:jlabre:v:38:y:2017:i:2:d:10.1007_s12122-017-9242-y is not listed on IDEAS
    4. Karolina Goraus & Joanna Tyrowicz, 2013. "The Goodwill Effect? Female Access to the Labor Market Over Transition: A Multicountry Analysis," Working Papers 2013-19, Faculty of Economic Sciences, University of Warsaw.
    5. El-hadj Bah & Josef C. Brada, 2014. "Labor Markets in the Transition Economies: An Overview," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 11(1), pages 3-53, June.
    6. CHEN, Guifu & HAMORI, Shigeyuki, 2009. "Economic returns to schooling in urban China: OLS and the instrumental variables approach," China Economic Review, Elsevier, vol. 20(2), pages 143-152, June.
    7. Kanjilal-Bhaduri, Sanghamitra & Pastore, Francesco, 2017. "Returns to Education and Female Participation Nexus: Evidence from India," IZA Discussion Papers 11209, Institute for the Study of Labor (IZA).
    8. Raslavičius, Laurencas, 2012. "Renewable energy sector in Belarus: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(7), pages 5399-5413.
    9. Amarjargal DAIRII & Terukazu SURUGA, 2006. "Economic Returns to Schooling in Transition: A Case of Mongolia," GSICS Working Paper Series 9, Graduate School of International Cooperation Studies, Kobe University.
    10. Danilovich, Hanna & Croucher, Richard, 2015. "Investment in personnel and FDI in Belarusian companies," International Business Review, Elsevier, vol. 24(6), pages 966-971.
    11. Strawinski, Pawel, 2008. "External Return to Education in Poland," MPRA Paper 11598, University Library of Munich, Germany.
    12. Pastore Francesco & Verashchagina Alina, 2007. "The gender wage gap in the Republic of Belarus," EERC Working Paper Series 04-133e, EERC Research Network, Russia and CIS.
    13. Kanjilal-Bhaduri, Sanghamitra & Pastore, Francesco, 2018. "Returns to Education and Female Work Force Participation Nexus: Evidence from India," GLO Discussion Paper Series 162, Global Labor Organization (GLO).
    14. Strawinski, Pawel, 2007. "Changes In Return To Higher Education In Poland 1998-2004," MPRA Paper 5185, University Library of Munich, Germany.
    15. Karolina Goraus & Joanna Tyrowicz & Lucas van der Velde, 2017. "How (Not) to Make Women Work?," GRAPE Working Papers 1, GRAPE Group for Research in Applied Economics.
    16. Searing, Elizabeth A.M. & Rios-Avila, Fernando & Lecy, Jesse D., 2013. "The impact of psychological trauma on wages in post-conflict Bosnia and Herzegovina," Social Science & Medicine, Elsevier, vol. 96(C), pages 165-173.
    17. Alexander Chubrik & Alaksei Kazlou, 2013. "Costs and Benefits of Labour Mobility between the EU and the Eastern Partnership Partner Countries. Country report: Belarus," CASE Network Studies and Analyses 0462, CASE-Center for Social and Economic Research.
    18. Tamar Khitarishvili, 2010. "Assessing the Returns to Education in Georgia," Economics Working Paper Archive wp_608, Levy Economics Institute.
    19. Tom Coupe & Hanna Vakhitova, 2011. "Recent Dynamics of Returns to Education in Transition Countries," Discussion Papers 39, Kyiv School of Economics.
    20. Phanhpakit ONPHANHDALA & Terukazu SURUGA, 2007. "Education and Earnings in Lao PDR: Further Results," GSICS Working Paper Series 16, Graduate School of International Cooperation Studies, Kobe University.
    21. Arabsheibani, Reza & Mussurov, Altay, 2006. "Returns to Schooling in Kazakhstan: OLS and Instrumental Variables Approach," IZA Discussion Papers 2462, Institute for the Study of Labor (IZA).
    22. Strawinski, Pawel, 2008. "Changes in return to higher education in Poland 1998-2005," MPRA Paper 9533, University Library of Munich, Germany.
    23. Joanna Tyrowicz & Lucas van der Velde, 2017. "When the opportunity knocks: large structural shocks and gender wage gaps," GRAPE Working Papers 2, GRAPE Group for Research in Applied Economics.

    More about this item

    Keywords

    educational economics; returns to human capital; economic transition; Belarus;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • P52 - Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies

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