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Returns to basic skills in central and eastern Europe

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  • Kevin Denny
  • Orla Doyle

Abstract

This article uses semi‐parametric econometric techniques to investigate the relationship between basic skills and earnings in three post‐communist countries: the Czech Republic, Hungary and Slovenia, using the International Adult Literacy Survey dataset. It finds that including a measure of basic skills in a Mincer model reduces the returns to education. In addition, using a partially linear model, in which log earnings is linear in education but is an arbitrary function of basic skills, it finds that this relationship is not well described by the common assumption of linearity at the tails of the distribution.

Suggested Citation

  • Kevin Denny & Orla Doyle, 2010. "Returns to basic skills in central and eastern Europe," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 18(1), pages 183-208, January.
    • Handle: RePEc:bla:etrans:v:18:y:2010:i:1:p:183-208
    DOI: 10.1111/j.1468-0351.2009.00368.x
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    3. Nikolov, Plamen & Jimi, Nusrat & Chang, Jerray, 2020. "The Importance of Cognitive Domains and the Returns to Schooling in South Africa: Evidence from Two Labor Surveys," Labour Economics, Elsevier, vol. 65(C).
    4. Antoni, Manfred & Heineck, Guido, 2012. "Do literacy and numeracy pay off? On the relationship between basic skills and earnings," BERG Working Paper Series 86, Bamberg University, Bamberg Economic Research Group.
    5. Aline Branche-Seigeot, 2013. "La valorisation des compétences de base sur le marché du travail français," Post-Print halshs-00794385, HAL.
    6. Kevin Denny & Wen Zhang, 2010. "In praise of ambidexterity: How a continuum of handedness predicts social adjustment," Working Papers 201004, School of Economics, University College Dublin.
    7. Giorgio Brunello & Elena Crivellaro & Lorenzo Rocco, 2012. "Lost in transition?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 20(4), pages 637-676, October.

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