Returns to Skills and the Speed of Reforms: Evidence from Central and Eastern Europe, China, and Russia

By B. Fleisher, Klara Z. Sabirianova, Xiaojun Wang. Social Science Research Network, 2005

193 citations recorded by the source corpus.

We explore the pace of increase in returns to schooling during the transition from planning to market over time across a number of Central and Eastern European countries, Russia, and China. We use metadata from 33 studies of 10 transition economies covering a period from 1975 through 2002. Our empirical model is an attempt to account for crosssection and over-time variation in rates of return as a function of the timing, speed, and volatility of reform processes as well as estimation methods used and sample characteristics. Our principal aim is to investigate the relative strength of two hypotheses: (1) the speed of economic transformation from planning to market represent the relaxation of legal, regulatory, and institutional constraints on wage-setting behavior, leading directly to adjustment returns to schooling to market rates; 2) the rapid increase in returns to schooling during the early reform period reflects the ability of highly-educated individuals to respond to changing opportunities in a disequilibrium situation. We find that both the speed of reforms and the degree of economic disequilibrium as reflected in macroeconomic volatility help to explain cross-country differences in the time paths of the returns to schooling. We report the systematic effects of sample characteristics, estimation methods, and model specifications on estimated returns to schooling.

Subfields: Economics and Econometrics, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/62dca5a0fcd522dd4120ce37be5bac6d3e188a59

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In Economics and Econometrics

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Citations in the corpus

• Rising Wages: Has China Lost its Global Labor Advantage? (2010, unknown): “studying topics such as returns to education (e.g., Liu, 1998; Li 2001; Fleisher et al. 2005; Zhang et. al. 2005; Yang, 2005), income inequality (e.”
• Has China crossed the river? The evolution of wage structure in urban China during reform and retrenchment (2005, background): “By contrast,Fleisher et al. (2005)find that most transition countries experienc marked increases in the returns to education, with the possible exception of Russia, dur period.”
• Determinants of schooling returns during transition: Evidence from Chinese cities (2005, methodology): “3 Fleisher et al. (2005)examine how the timing of reform and macroeconomic volatility affect cross-cou differences in returns to schooling, based on a metadata set constructed from 33 studies of 10 t economies.”
• Returns to Education in the Economic Transition: A Systematic Assessment Using Comparable Data (2007, unknown): “(3)See for example, Fleisher et al. (2005). They use metadata of”