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

Daniela Andrén (), John Earle () and Dana Sapatoru
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Dana Sapatoru: W.E. Upjohn Institute for Employment Research

No 04-108, Staff Working Papers from W.E. Upjohn Institute for Employment Research

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.

Keywords: returns to schooling; human capital; education; wage differentials; transition; Romania (search for similar items in EconPapers)
JEL-codes: I20 J23 J24 J31 O15 P23 P31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-edu, nep-his, nep-lab and nep-tra
Date: 2004-11
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Journal Article: The wage effects of schooling under socialism and in transition: Evidence from Romania, 1950-2000 (2005)
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