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

Francesco Pastore and Alina Verashchagina ()

No 1409, IZA Discussion Papers from Institute of Labor Economics (IZA)

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.

Keywords: educational economics; returns to human capital; economic transition; Belarus (search for similar items in EconPapers)
JEL-codes: J31 P52 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2004-11
New Economics Papers: this item is included in nep-tra
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Citations: View citations in EconPapers (4)

Published - published in: Economics of Education Review, 2006, 25(1), 91-107

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Journal Article: Private returns to human capital over transition: A case study of Belarus (2006)
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