DP4760 Do Markets Favour Women's Human Capital More Than Planners?

Author(s): Daniel Münich , Jan Svejnar , Katherine Terrell

Publication Date: November 2004

Keyword(s): human capital , wages , transition , sheepskin effects , czech republic

JEL(s): J24 , J31 , P20 , P31

Programme Areas: Institutions and Economic Performance , Labour Economics

Link to this Page: www.cepr.org/pubs/dps/DP4760.asp

Using micro data on women in the Czech Republic, we compare returns to various measures of human capital at the end of communism (1989), in mid-transition (1996) and in late/post-transition (2002). We show: dramatic increases in returns to education from 1989 to 1996 but no change from 1996 to 2002; no differences in returns to education by state vs. privately-owned firms; ‘sheepskin’ effects in both regimes, which rise over time and are similar across firm ownership; no difference in returns to education obtained during communism vs. transition; no change in wage-experience profiles over time; and similar increases in returns to education for women and men. In sum, markets pay women and men equally more for their human capital than the planners did; all the adjustment occurred in early transition and was driven by market forces rather than private ownership.