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Returns to basic skills in Central & Eastern Europe : a semi parametric approach

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  • Kevin Denny
  • Orla Doyle

Abstract

This paper uses semi-parametric econometric techniques to investigate the relationship between basic skills and earning in three post-communist countries: the Czech Republic, Hungary and Slovenia using the IALS dataset. While the large increases in the returns to education in the new market economies has been well documented in the literature, no study to date has examined the impact of basic skills and schooling on income. Estimating a Mincer human capital model we find that including a measure of basic skills reduces the returns to education. In addition, using a partial linear model in which log earnings is linear in schooling, but is an arbitrary function of basic skills, we find that this relationship is not well described by the common assumption of linearity at the tails of the distribution.

Suggested Citation

  • Kevin Denny & Orla Doyle, 2005. "Returns to basic skills in Central & Eastern Europe : a semi parametric approach," Working Papers 200507, School of Economics, University College Dublin.
  • Handle: RePEc:ucn:wpaper:200507
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    File URL: http://hdl.handle.net/10197/97
    File Function: First version, 2005
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. 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.
    2. 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.

    More about this item

    Keywords

    Earnings; Education; Basic skills; Transition; Fundamental education--Europe; Eastern; Wages--Europe; Eastern;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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