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Self-Selection And Earnings During Volatile Transition

  • Ira N. Gang

    ()

    (Rutgers University)

  • Ralitza Dimova

    ()

    (LICOS, Catholic University of Leuven)

Using Bulgarian Integrated Household Surveys for 1995, 1997 and 2001 this paper explores determinants of labor force status – not working, public sector employment, private sector employment and self-employment – and earnings for each of the three employment sectors. We find that while skilled labor’s pattern of reallocation into the public sector remains roughly the same over time, the inflow of highly educated laborers into the private sector and self-employment increases. These changes coincide with the erosion of the returns to observed skills in the private sector and self-employment, while the public sector continues to reward all types of education at higher than the elementary level.

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Paper provided by Rutgers University, Department of Economics in its series Departmental Working Papers with number 200409.

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Length: 20 pages
Date of creation: 18 May 2004
Date of revision:
Handle: RePEc:rut:rutres:200409
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  1. Hunt, Jennifer, 1998. "The Transition in East Germany: When is a Ten Point Fall in the Gender Wage Gap Bad News?," CEPR Discussion Papers 1805, C.E.P.R. Discussion Papers.
  2. Robert S. Chase, 1998. "Markets for communist human capital: Returns to education and experience in the Czech republic and Slovakia," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 51(3), pages 401-423, April.
  3. Edward J. Bird & Johannes Schwarze & Gert Wagner, 1994. "Wage effects of the move toward free markets in East Germany," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 47(3), pages 390-400, April.
  4. I Beleva & Richard Jackman & M Nenova-Amar, 1995. "The Labour Market in Bulgaria," CEP Discussion Papers dp0268, Centre for Economic Performance, LSE.
  5. Tito Boeri & Katherine Terrell, 2002. "Institutional Determinants of Labor Reallocation in Transition," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 51-76, Winter.
  6. 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.
  7. Gang, Ira N. & Stuart, Robert C., 1997. "What difference does a country make? Earnings by Soviets in the Soviet Union and in the United States," The Quarterly Review of Economics and Finance, Elsevier, vol. 37(Supplemen), pages 345-360.
  8. Earle, John S. & Sakova, Zuzana, 2000. "Business start-ups or disguised unemployment? Evidence on the character of self-employment from transition economies," Labour Economics, Elsevier, vol. 7(5), pages 575-601, September.
  9. Blanchard, Olivier Jean & Aghion, Philippe, 1994. "On the Speed of Transition in Central Europe," Scholarly Articles 4481322, Harvard University Department of Economics.
  10. Catherine Y. Co & Ira N. Gang & Myeong-Su Yun, 2005. "Self-Employment and Wage Earning in Hungary," Review of Development Economics, Wiley Blackwell, vol. 9(2), pages 150-165, 05.
  11. Falaris, Evangelos M., 2004. "Private and public sector wages in Bulgaria," Journal of Comparative Economics, Elsevier, vol. 32(1), pages 56-72, March.
  12. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
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