Wage determination under plan and early transition: Bulgarian evidence using matched employer–employee data

Abstract

By using a large panel containing matching employer-employee information, noncompetitive forces are found to dominate wage determination during planning. During early transition the process becomes much more market driven, though a significant role remains for other factors. The preferred specifications are not baseline models restricted to conventional dimensions of human capital, but always include firm-and person-specific fixed effects and other firm and individual attributes. Depending on the particular specification, returns to education at least double during transition and the significance of human capital variables is insensitive to the inclusion of firm effects. However, findings for other variables are sensitive to specifications that do or do not include firm effects as well as person effects.

Skill differentials, return to schooling, and market segmentation in a transition economy: the case of Mainland China

“…A persistent puzzle in China's economic evolution from reform through at least the mid-1990s is that wage differences by level of skill, occupation, and/or schooling remained very narrow and returns to higher education remained low in comparison with those in other countries, 2 both industrialized and industrializing, and when compared to those in some smaller transition economies, including, for example, the Czech Republic (Munich et al, 2000), Slovenia (Orazem and Vodopivec, 1995), and Bulgaria (Jones and Ilayperuma, 1994). Although returns to higher education in the Russian Republic are among the lowest in the world, this can in large part be attributed to the extraordinarily high proportion of college graduates in Russia (over 20% of individuals aged 25-64 in 1995), which is nearly equal to that in the United States and higher than the average for OECD countries.…”

Returns To Education In The Economic Transition : A Systematic Assessment Using Comparable Data

“…Table 4 also provides supplementary evidence on what may be driving the relatively weak estimated increase in aggregated returns-in particular, the possibility of offsetting developments in returns, depending on the sector of employment. Where the increase in private sector returns is modest, the secondary influence on public sector wage may also be modest, such as in the case of Bulgaria (Jones & Simon, 2004). The results show that returns to education have increased for both public and private sector workers over time in Hungary and Russia.…”

“…To the best of our knowledge, this study is the first to quantify the trends in returns to years of schooling in Latvia, and Slovenia. With the exception of the work of Rutkowski (1999) and Jones and Simon (2004), this study is also the only other attempt to estimate the trends in returns to schooling in Bulgaria. Finally, we consider our measure of the number of years of schooling to be more accurate than the one adopted in many other studies (e.g., Brainerd, 1998;Flanagan, 1998;Vernon, 2002), since we use the number reported by the respondents themselves, rather than an imputed value derived from the reported school attainment (see Munich, Svejnar, & Terrell, 1999).…”

Wages, layoffs, and privatization: Evidence from Ukraine

“…3 Most studies that do follow firms before and after privatization have very short time series, such as La Porta and Lopez-de-Silanes' (1999) study of 170 privatized firms in Mexico with information on only one year after privatization. Jones and Simon (2005) estimate wage regressions with two-year panels at the very start of privatization in Bulgaria. Only two studies, Lizal and Svejnar (2002) and Brown et al (2005), use large samples of firms before and after privatization, include state firms as a control group, and employ firm fixed effects; thus they are able to handle selection through regression-adjusted difference-in-differences.…”