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

W.E. Upjohn Institute Staff Working Paper No. 04-108

42 Pages Posted: 29 Dec 2004

See all articles by John S. Earle

John S. Earle

George Mason University - Schar School of Policy and Government; IZA Institute of Labor Economics

Daniela Andren

Örebro University School of Business

Dana Sapatoru

W.E. Upjohn Institute for Employment Research

Date Written: November 2004

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

JEL Classification: I20, J23, J24, J31, O15, P23, P31

Suggested Citation

Earle, John S. and Andrén, Daniela and Sapatoru, Dana, The Wage Effects of Schooling Under Socialism and in Transition: Evidence from Romania, 1950-2000 (November 2004). W.E. Upjohn Institute Staff Working Paper No. 04-108, Available at SSRN: https://ssrn.com/abstract=634083 or http://dx.doi.org/10.2139/ssrn.634083

John S. Earle (Contact Author)

George Mason University - Schar School of Policy and Government ( email )

3351 Fairfax Drive
MS 3B1
Arlington, VA 22201
United States
703-993-8023 (Phone)

HOME PAGE: http://earle.gmu.edu

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Daniela Andrén

Örebro University School of Business ( email )

Department of Economics
Örebro, 70182
Sweden
+46-(0)19-30 35 71 (Phone)

HOME PAGE: http://www.oru.se/english/employee/daniela_andren

Dana Sapatoru

W.E. Upjohn Institute for Employment Research ( email )

300 South Westnedge Avenue
Kalamazoo, MI 49007-4686
United States

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