DP4215 After, Before and During: Returns to Education in Hungary (1986-1998)

Author(s): Nauro F Campos, Dean Jolliffe
Publication Date: February 2004
Keyword(s): human capital, hungary, transition economics
JEL(s): I20, J20, J24, J31, O15, O52, P20
Programme Areas: Labour Economics, Transition Economics, Institutions and Economic Performance
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=4215

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.