IDEAS home Printed from https://ideas.repec.org/p/upj/weupjo/jse20051.html
   My bibliography  Save this paper

The Wage Effects of Schooling under Socialism and in Transition: Evidence from Romania, 1950-2000

Author

Abstract

We estimate the impact of schooling on monthly earnings from 1950 to 2000 in Romania. Nearly constant at about 3-4 percent during the socialist period, the coefficient on schooling in a conventional earnings regression rises steadily during the 1990s, reaching 8.5 percent by 2000. Our analysis finds little evidence for either the standard explanations of such an increase in the West (labor supply movements, product demand shifts, technical change) or the transition-specific accounts sometimes offered (wage liberalization, border opening, increased quality of education). But we find some support for institutional and organizational explanations, particularly the high productivity of education in restructuring and entrepreneurial activities in a disequilibrium environment.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Daniela Andren & John S. Earle & Dana Sapatoru, "undated". "The Wage Effects of Schooling under Socialism and in Transition: Evidence from Romania, 1950-2000," Upjohn Working Papers and Journal Articles jse20051, W.E. Upjohn Institute for Employment Research.
  • Handle: RePEc:upj:weupjo:jse20051 Note: Appears in Journal of Comparative Economics 33(2): 300-323
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0147596705000181
    Download Restriction: All working papers are copyrighted.

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Jiri Vecerník, 1995. "Changing earnings distribution in the Czech republic: survey evidence from 1988-1994," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 3(3), pages 355-371, September.
    2. Fleisher, Belton M. & Wang, Xiaojun, 2005. "Returns to schooling in China under planning and reform," Journal of Comparative Economics, Elsevier, pages 265-277.
    3. Earle, John S. & Pagano, Ugo & Lesi, Maria, 2006. "Information technology, organizational form, and transition to the market," Journal of Economic Behavior & Organization, Elsevier, pages 471-489.
    4. Daniel Münich & Jan Svejnar & Katherine Terrell, 2005. "Returns to Human Capital Under The Communist Wage Grid and During the Transition to a Market Economy," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 100-123, February.
    5. 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.
    6. Robert W. Fairlie & Bruce D. Meyer, 1996. "Ethnic and Racial Self-Employment Differences and Possible Explanations," Journal of Human Resources, University of Wisconsin Press, pages 757-793.
    7. Klara Sabirianova Peter, 2003. "Skill-Biased Transition: The Role of Markets, Institutions, and Technological Change," William Davidson Institute Working Papers Series 2003-616, William Davidson Institute at the University of Michigan.
    8. Brainerd, Elizabeth, 1998. "Winners and Losers in Russia's Economic Transition," American Economic Review, American Economic Association, pages 1094-1116.
    9. Commander, Simon & Köllő, János, 2004. "The Changing Demand for Skills: Evidence from the Transition," IZA Discussion Papers 1073, Institute for the Study of Labor (IZA).
    10. John S. Earle & Almos Telegdy, 1998. "The results of 'mass privatization'in Romania: A first empirical study," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 6(2), pages 313-332, November.
    11. Skoufias, Emmanuel, 2003. "The structure of wages during the economic transition in Romania," Economic Systems, Elsevier, pages 345-366.
    12. Fleisher, Belton M. & Sabirianova, Klara & Wang, Xiaojun, 2005. "Returns to skills and the speed of reforms: Evidence from Central and Eastern Europe, China, and Russia," Journal of Comparative Economics, Elsevier, pages 351-370.
    13. Borjas, George J & Bronars, Stephen G, 1989. "Consumer Discrimination and Self-employment," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 581-605, June.
    14. David Card & John E. DiNardo, 2002. "Skill-Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles," Journal of Labor Economics, University of Chicago Press, vol. 20(4), pages 733-783, October.
    15. Earle, John S. & Telegdy, Almos, 2002. "Privatization Methods and Productivity Effects in Romanian Industrial Enterprises," Journal of Comparative Economics, Elsevier, pages 657-682.
    16. Campos, Nauro F. & Jolliffe, Dean, 2003. "After, before and during: returns to education in Hungary (1986-1998)," Economic Systems, Elsevier, vol. 27(4), pages 377-390, December.
    17. Earle, John S. & Telegdy, Almos, 2002. "Privatization Methods and Productivity Effects in Romanian Industrial Enterprises," Journal of Comparative Economics, Elsevier, pages 657-682.
    18. 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.
    19. 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.
    20. Filer, Randall K. & Jurajda, Stepan & Planovsky, Jan, 1999. "Education and wages in the Czech and Slovak Republics during transition," Labour Economics, Elsevier, vol. 6(4), pages 581-593, November.
    21. Gill, Andrew M, 1988. "Choice of Employment Status and the Wages of Employees and the Self-employed: Some Further Evidence," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 3(3), pages 229-234, July-Sept.
    22. Evans, David S & Leighton, Linda S, 1989. "Some Empirical Aspects of Entrepreneurship," American Economic Review, American Economic Association, pages 519-535.
    23. Earle, John S. & Pauna, Catalin, 1996. "Incidence and duration of unemployment in Romania," European Economic Review, Elsevier, vol. 40(3-5), pages 829-837, April.
    24. Erik Brynjolfsson & Lorin M. Hitt, 2000. "Beyond Computation: Information Technology, Organizational Transformation and Business Performance," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 23-48, Fall.
    25. Kornai, Janos, 1992. "The Socialist System: The Political Economy of Communism," OUP Catalogue, Oxford University Press, number 9780198287766.
    26. Pauna, Catalin, 2009. "Labor Reallocation in Transitional Economies - Twenty Years Later," Journal for Economic Forecasting, Institute for Economic Forecasting, pages 180-194.
    27. Schultz, Theodore W, 1975. "The Value of the Ability to Deal with Disequilibria," Journal of Economic Literature, American Economic Association, pages 827-846.
    28. John S. Earle, 1997. "Industrial Decline and Labor Reallocation in Romania," William Davidson Institute Working Papers Series 118, William Davidson Institute at the University of Michigan.
    29. Chris Robinson & Audra J. Bowlus, 2004. "Technological Change in the Production of Human Capital: Implications for Human Capital Stocks, Wages and Skill Differentials," 2004 Meeting Papers 218, Society for Economic Dynamics.
    30. Avner Ben-Ner & J. Michael Montias, 1991. "The Introduction of Markets in a Hypercentralized Economy: The Case of Romania," Journal of Economic Perspectives, American Economic Association, vol. 5(4), pages 163-170, Fall.
    31. Rees, Hedley & Shah, Anup, 1986. "An Empirical Analysis of Self-employment in the U.K," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 1(1), pages 95-108, January.
    32. Peter, Klara Sabirianova, 2003. "Skill-Biased Transition: The Role of Markets, Institutions, and Technological Change," IZA Discussion Papers 893, Institute for the Study of Labor (IZA).
    33. 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.
    34. Barton H. Hamilton, 2000. "Does Entrepreneurship Pay? An Empirical Analysis of the Returns to Self-Employment," Journal of Political Economy, University of Chicago Press, vol. 108(3), pages 604-631, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Paolo Brunori & Flaviana Palmisano & Vito Peragine, 2014. "Income taxation and equity: New dominance criteria and an application to Romania," Working Papers 348, ECINEQ, Society for the Study of Economic Inequality.
    2. Robert Orlowski & Regina T. Riphahn, 2009. "The East German wage structure after transition," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 17(4), pages 629-659, October.
    3. Andrén, Daniela, 2010. ""In every rank, or great or small, ’Tis industry supports us all": Romanians and ethnic Hungarians, and their wages, in transition," Working Papers 2010:1, Örebro University, School of Business.
    4. Regina T. Riphahn & Michael Zibrowius, 2013. "Apprenticeship Training and Early Labor Market Outcomes in East and West Germany," Working Papers 136, Bavarian Graduate Program in Economics (BGPE).
    5. Kahanec, Martin & Kureková, Lucia Mýtna, 2014. "Did Post-Enlargement Labor Mobility Help the EU to Adjust During the Great Recession? The Case of Slovakia," IZA Discussion Papers 8249, Institute for the Study of Labor (IZA).
    6. Andrén, Daniela & Andrén, Thomas, 2007. "Occupational Gender Composition and Wages in Romania: From Planned Equality to Market Inequality?," IZA Discussion Papers 3152, Institute for the Study of Labor (IZA).
    7. 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.
    8. Li, Hongbin & Liu, Pak Wai & Zhang, Junsen, 2012. "Estimating returns to education using twins in urban China," Journal of Development Economics, Elsevier, pages 494-504.
    9. Elizabeth Brainerd, 2010. "Human Development in Eastern Europe and the CIS Since 1990," Human Development Research Papers (2009 to present) HDRP-2010-16, Human Development Report Office (HDRO), United Nations Development Programme (UNDP).
    10. 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.
    11. John Earle, 2012. "Industrial decline and labor reallocation in a transforming economy: Romania in early transition," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 1(1), pages 1-18, December.
    12. Brunello, Giorgio & Crivellaro, Elena & Rocco, Lorenzo, 2010. "Lost in Transition? The Returns to Education Acquired under Communism 15 Years after the Fall of the Berlin Wall," IZA Discussion Papers 5409, Institute for the Study of Labor (IZA).
    13. Giorgio Brunello & Elena Crivellaro & Lorenzo Rocco, 2012. "Lost in transition?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 20(4), pages 637-676, October.
    14. Fidrmuc, Jarko & Senaj, Matus, 2012. "Human Capital, Consumption, and Housing Wealth in Transition," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 62058, Verein für Socialpolitik / German Economic Association.
    15. Pribac Loredana Ioana & Anghelina Andrei & Blaga Radu Lucian, 2016. "Return on investment in education. Case study on education in Romania," Studia Universitatis „Vasile Goldis” Arad – Economics Series, De Gruyter Open, vol. 26(1), pages 26-39, March.
    16. Daniela Andrén & Thomas Andrén, 2015. "Gender and occupational wage gaps in Romania: from planned equality to market inequality?," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-27, December.
    17. Anita V. Staneva & Hany Abdel-Latif, 2016. "From Soviet to Europe: Returns to Education Puzzle in Bulgaria," LABOUR, CEIS, vol. 30(3), pages 347-367, September.
    18. Jarko FIDRMUC & Matus SENAJ, 2014. "Income, Schooling and Housing Wealth during Economic Reforms," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 64(2), pages 160-176, March.
    19. Józef Dziechciarz, 2015. "Measurement of Rate of Return in Education. Research Directions," Proceedings of FIKUSZ 2015,in: Jolán Velencei (ed.), Proceedings of FIKUSZ '15, pages 39-56 Óbuda University, Keleti Faculty of Business and Management.
    20. Wyrwich, Michael, 2013. "Can socioeconomic heritage produce a lost generation with regard to entrepreneurship?," Journal of Business Venturing, Elsevier, vol. 28(5), pages 667-682.
    21. Martina Mysikova & Jiri Vecernik, 2015. "Returns to education in transition and advanced European countries: The role of an expansion of higher education," Investigaciones de Economía de la Educación volume 10,in: Marta Rahona López & Jennifer Graves (ed.), Investigaciones de Economía de la Educación 10, edition 1, volume 10, chapter 44, pages 865-886 Asociación de Economía de la Educación.
    22. Andrén, Daniela, 2012. "Romanians, Hungarians and their wages, in transition, in Romania," Economic Modelling, Elsevier, vol. 29(6), pages 2673-2685.

    More about this item

    Keywords

    transition economies; job creation; firm-level data;

    JEL classification:

    • P2 - Economic Systems - - Socialist Systems and Transition Economies
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:upj:weupjo:jse20051. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: http://edirc.repec.org/data/upjohus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.