published in: Economics of Education Review, 2006, 25(1), 91-107
The gradualist approach to economic transition in Belarus would contribute to form the a
priori expectation that the rate of return to education is low and the earnings profile by work
experience flat, like they supposedly were under central-planning. However, the first available
estimates of Mincerian earnings equations based on the Belarusian Household Survey on
Incomes and Expenditure suggest that the skill payoff was high in 1996, at about 10.1% per
year, and stable. The return to one year of work experience is also high at 5%. This result
maintains also after controlling for sample selection bias, despite a general reduction in the
annual rate of return to education by about 20-30%. Though, it is ambiguous whether the
high-skill payoff is the consequence of market forces coming into play or of policy decisions,
considering the pervasive role of the state in the process of wage determination.
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