Returns to the Market: Valuing Human Capital in the Post-Transition Czech and Slovak Republics

Posted: 6 Feb 2000

See all articles by Randall K. Filer

Randall K. Filer

City University of New York, CUNY Hunter College - Department of Economics; Charles University in Prague - CERGE-EI (Center for Economic Research and Graduate Education - Economics Institute); University of Michigan at Ann Arbor - The William Davidson Institute; CESifo (Center for Economic Studies and Ifo Institute)

Stepan Jurajda

CERGE-EI; IZA Institute of Labor Economics; Academy of Sciences, Czech Republic

Jan Planovsky

Charles University in Prague - CERGE-EI (Center for Economic Research and Graduate Education - Economics Institute)

Multiple version iconThere are 2 versions of this paper

Date Written: March 1999

Abstract

An employer-based sample of over between 200,000 and 300,000 Czech and 50,000 to 100,000 Slovak workers is used to estimate returns to various forms of human capital between 1995 and 1997 (to be extended to 1998). By 1997 education of all types had become substantially more highly rewarded in both countries than it was either under communism or in the early years of the transition. By 1997 returns to education were approximately equal to those in other OECD countries. Increases in the value of education were especially pronounced for types of education ideologically disfavored by communism and younger workers but were approximately equal for men and women. Returns to experience (age) increases slightly in Slovakia and remained unchanged in the Czech Republic, suggesting that human capital acquired at work under communism was not significantly devalued by the shift to a market economy. Both the variance of log wages and the unexplained residual in a wage equation increased substantially, suggesting that returns to unmeasured forms of human capital also increased. The evidence is that restructuring of wages followed a well defined sequence, beginning with private firms in the low-unemployment Czech Republic, extending to state sector workers in the Czech Republic and employees of private firms in Slovakia next, and reaching state sector workers in Slovakia last, if at all.

JEL Classification: J24

Suggested Citation

Filer, Randall K. and Jurajda, Stepan and Planovsky, Jan, Returns to the Market: Valuing Human Capital in the Post-Transition Czech and Slovak Republics (March 1999). Available at SSRN: https://ssrn.com/abstract=209068

Randall K. Filer (Contact Author)

City University of New York, CUNY Hunter College - Department of Economics ( email )

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HOME PAGE: http://econ.hunter.cuny.edu/faculty/filer/

Charles University in Prague - CERGE-EI (Center for Economic Research and Graduate Education - Economics Institute) ( email )

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HOME PAGE: http://www.cerge-ei.cz

University of Michigan at Ann Arbor - The William Davidson Institute

724 E. University Ave.
Wyly Hall
Ann Arbor, MI 48109-1234
United States

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Stepan Jurajda

CERGE-EI ( email )

Politickych veznu 7
Prague 1, 111 21
Czech Republic

HOME PAGE: http://www.cerge-ei.cz

IZA Institute of Labor Economics

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

Academy of Sciences, Czech Republic

Narodni 3, 111 42
Economics Institute
Praha 1
Czech Republic

Jan Planovsky

Charles University in Prague - CERGE-EI (Center for Economic Research and Graduate Education - Economics Institute)

P.O. Box 882
7 Politickych veznu
Prague 1, 111 21
Czech Republic

HOME PAGE: http://www.cerge-ei.cz

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