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After, Before and During: Returns to Education in Hungary (1986-1998)

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  • Campos, Nauro
  • Jolliffe, Dean
Abstract
How valuable are the skills acquired under socialism in a market economy? This Paper throws light on this question using unique data covering the years before and during transition (1986-98) for about 3 million Hungarian wage earners. We find that returns to a year of schooling increased by 75% from 6.4% in 1986 to 11.2% in 1998. We also find that the private sector rewards formal education more than the public and, in terms of gender, although in 1986 women had greater returns to schooling than men, by 1998 this difference had been eliminated.

Suggested Citation

  • Campos, Nauro & Jolliffe, Dean, 2004. "After, Before and During: Returns to Education in Hungary (1986-1998)," CEPR Discussion Papers 4215, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:4215
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    1. Nauro F. Campos & Dean Jolliffe, 2002. "After, Before and During: Returns to Education in the Hungarian Transition," William Davidson Institute Working Papers Series 475, William Davidson Institute at the University of Michigan.
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    Cited by:

    1. Joanna Tyrowicz & Lucas van der Velde, 2017. "When the opportunity knocks: large structural shocks and gender wage gaps," GRAPE Working Papers 2, GRAPE Group for Research in Applied Economics.
    2. Brixiova, Zuzana & Li, Wenli & Yousef, Tarik, 2009. "Skill shortages and labor market outcomes in Central Europe," Economic Systems, Elsevier, vol. 33(1), pages 45-59, March.
    3. Andren, Daniela & Earle, John S. & Sapatoru, Dana, 2005. "The wage effects of schooling under socialism and in transition: Evidence from Romania, 1950-2000," Journal of Comparative Economics, Elsevier, vol. 33(2), pages 300-323, June.
    4. Clark, Gregory & Bukowski, Paweł & Gáspár, Attila & Pető, Rita, 2020. "Social Mobility and Social Regimes: Intergenerational Mobility in Hungary, 1949-2017," CEPR Discussion Papers 15284, C.E.P.R. Discussion Papers.
    5. Paweł Bukowski & Gregory Clark & Attila Gáspár & Rita Pető, 2022. "Social Mobility and Political Regimes: Intergenerational Mobility in Hungary, 1949–2017," Journal of Population Economics, Springer;European Society for Population Economics, vol. 35(4), pages 1551-1588, October.
    6. Kevin Denny & Patrick Orla Doyle, 2005. "Returns to basic skills in Central and Eastern Europe - a semi-parametric approach," Working Papers 200507, School of Economics, University College Dublin.
    7. Lenka Drnakova, 2007. "Determinants of Secondary School Choice in the Czech Republic," CERGE-EI Working Papers wp341, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    8. Doan, Tinh & Tran, Tuyen Quang & Nguyen, Hien, 2018. "Provincial Competitiveness And Labour Market Returns In Vietnam," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 59(2), pages 95-112, December.
    9. Joanna Tyrowicz & Lucas Augusto van der Velde, 2021. "When Opportunity Knocks: Confronting Theory and Empirics About Dynamics of Gender Wage Inequality," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 155(3), pages 837-864, June.
    10. Bhaumik, Sumon Kumar & Chakrabarty, Manisha, 2009. "Is education the panacea for economic deprivation of Muslims?: Evidence from wage earners in India, 1987-2005," Journal of Asian Economics, Elsevier, vol. 20(2), pages 137-149, March.
    11. Patrinos, Harry Anthony & Rivera-Olvera, Angelica, 2023. "The Impact of the Transition and EU Membership on the Returns to Schooling in Europe," GLO Discussion Paper Series 1312, Global Labor Organization (GLO).
    12. Tran, Tuyen Quang & Hung Pham, Hiep & Thi Vo, Hoa & Thuy Luu, Hong & Mai Nguyen, Huong, 2019. "Local governance, education and occupation-education mismatch: Heterogeneous effects on wages in a lower middle income economy," International Journal of Educational Development, Elsevier, vol. 71(C).
    13. Tinh Doan & Quan Le & Tuyen Quang Tran, 2018. "Lost in Transition? Declining Returns to Education in Vietnam," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 30(2), pages 195-216, April.
    14. Tinh Doan & Tran Quang Tuyen & Hien Nguyen, 2018. "Local Competitiveness and Labour Market Returns in a Transition Economy: Evidence from Vietnam," Working Papers in Economics 18/06, University of Waikato.
    15. Kevin Denny & Orla Doyle, 2010. "Returns to basic skills in central and eastern Europe," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 18(1), pages 183-208, January.
    16. Cui, Yuling & Nahm, Daehoon & Tani, Massimiliano, 2013. "Earnings Differentials and Returns to Education in China, 1995-2008," IZA Discussion Papers 7349, Institute of Labor Economics (IZA).
    17. Searing, Elizabeth A.M. & Rios-Avila, Fernando & Lecy, Jesse D., 2013. "The impact of psychological trauma on wages in post-conflict Bosnia and Herzegovina," Social Science & Medicine, Elsevier, vol. 96(C), pages 165-173.
    18. Lili Kang & Fei Peng, 2012. "A selection analysis of returns to education in China," Post-Communist Economies, Taylor & Francis Journals, vol. 24(4), pages 535-554, March.
    19. 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.
    20. Jones, Derek C. & Ilayperuma Simon, Kosali, 2005. "Wage determination under plan and early transition: Bulgarian evidence using matched employer-employee data," Journal of Comparative Economics, Elsevier, vol. 33(2), pages 227-243, June.
    21. 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.
    22. 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.

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    More about this item

    Keywords

    Human capital; Hungary; Transition economics;
    All these keywords.

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • P20 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - General

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