Markets for Communist Human Capital: Returns to Education and Experience in the Czech Republic and Slovakia

This research examines differences in earnings structure between Communist and post-Communist Czech Republic and Slovakia using four sets of similar micro-data.It presents hypotheses about how earnings dispersion returns to education and returns to experience will change across regimes and tests those hypotheses using earnings equations.From approximately 2.5 percent in 1984, the return to education increased to approximately 5 percent by 1993.During that period, returns to experience fell.Though women have higher returns to education, returns for men increased more across regime change.Those with academic secondary education experienced a particularly large earnings increase.Earnings structure changes appear larger in the Czech Republic than in Slovakia.In former Communist countries, economic, political and social institutions have changed markedly since 1989.Previously, as part of a social policy purported to deliver equity between workers, central planners set wages by industry and occupation, so earnings and income profiles were compressed compared to those of market economies.Now that central planners' influence over the labor allocation system has relaxed, do earnings structures in post-Communist economies approximate those in market economies?While earnings seem to have become more dispersed, questions remain concerning their structure during the Communist era, in post-Communist economies, and differences between the two.How do earnings relate to worker characteristics, particularly worker's education and experience?Comparing the two regimes, are education and experience valued in different ways?How do men's and women's earnings differ across regime change?After correcting for observed human capital differences, is skill