Earnings, Schooling and Economic Reform: New Econometric Evidence

Campos, Nauro F.; Jolliffe, Dean

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Earnings, Schooling and Economic Reform: New Econometric Evidence

CEPR Discussion Paper No. 4716

39 Pages Posted: 6 Jan 2005

See all articles by Nauro F. Campos

Nauro F. Campos

University College London; University of Michigan at Ann Arbor - The William Davidson Institute; IZA Institute of Labor Economics

Dean Jolliffe

World Bank, DECDG; IZA Institute of Labor Economics; Global Labor Organization (GLO); Johns Hopkins University, Paul H. Nitze School of Advanced International Studies (SAIS), Students

There are 2 versions of this paper

Date Written: October 2004

Abstract

How does the relationship between earnings and schooling change with the introduction of comprehensive economic reform? This Paper uses a unique dataset (covering about 3 million Hungarian wage earners, from 1986 to 1998) and a novel procedure to correct sample selection bias (based on DiNardo, Fortin and Lemieux's) to shed light on this question. We find that reform was successful in general, increasing returns to skill by 70.5%, but that there were winners and losers. The winners seem to be the college and university educated, those employed by the smaller firms and those in commerce and services. The losers are those in manufacturing and agriculture and, surprisingly, those who received their formal education after the initiation of reform.

Keywords: Human capital, transition economics, economic reform

JEL Classification: I20, J20, J24, J31, O15, O52, P20

Suggested Citation: Suggested Citation

Campos, Nauro F. and Jolliffe, Dean, Earnings, Schooling and Economic Reform: New Econometric Evidence (October 2004). CEPR Discussion Paper No. 4716, Available at SSRN: https://ssrn.com/abstract=644232