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The Effect of Education on Earnings in a Post-Conflict Economy: Evidence from Bosnia and Herzegovina

Author

Listed:
  • Rizvanovic Aida

    (Ministry for Education Canton Sarajevo, Bosnia and Herzegovina)

  • Efendic Adnan

    (School of Economics and Business Sarajevo, University of Sarajevo, Bosnia and Herzegovina)

Abstract

This paper investigates the effect of formal education on individual earnings in Bosnia and Herzegovina (BiH). We use empirical regression analysis and an extended Mincer’s model, which are applied to the Labour Force Survey data from 2018. Our empirical results suggest that a higher level of both statutory and additional education has positive and statistically significant effect on higher earnings of individuals in this post-conflict society. Such a finding implies that investment in education, both statutory and additional, bring economic benefits to individuals, although this is sometimes challenged by the general public of this society. Moreover, we find that employees in the public sector record systematically higher earnings than those in the private sector, suggesting a need for strategic policies targeting this difference. The outcome of our analysis is a good indicator of productivity achieved through improved educational performance, and thus provides scientific evidence to the positive effect of human capital hypothesis in BiH.

Suggested Citation

  • Rizvanovic Aida & Efendic Adnan, 2021. "The Effect of Education on Earnings in a Post-Conflict Economy: Evidence from Bosnia and Herzegovina," Financial Internet Quarterly (formerly e-Finanse), Sciendo, vol. 17(2), pages 1-15, June.
    • Handle: RePEc:vrs:finiqu:v:17:y:2021:i:2:p:1-15:n:5
    DOI: 10.2478/fiqf-2021-0008
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    Cited by:

    1. Kovac,Dejan & Efendic,Adnan & Shapiro,Jacob N., 2022. "Forced Displacement, Exposure to Conflict and Long-run Education and Income Inequality : Evidence from Croatia and Bosnia and Herzegovina," Policy Research Working Paper Series 10021, The World Bank.

    More about this item

    Keywords

    education; individual earnings; human capital; Bosnia and Herzegovina;
    All these keywords.

    JEL classification:

    • A20 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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