Returns to skills and the speed of reforms: Evidence from Central and Eastern Europe, China, and Russia

Using metadata from 39 studies of 11 countries, we explore the growth in returns to schooling during transition across Central and Eastern European countries, Russia, and China. China differs from the other countries in exhibiting a relatively slow increase in returns to schooling. We investigate the relative importance of the slow decay of the effects of wage grids compared to the return to the ability that educated individuals have in taking advantage of economic disequilibria. caused by reform. Both explanations receive empirical support. We also investigate the systematic effects of sample characteristics, estimation methods, and model specifications on estimated returns to schooling. (c) 2005 Association for Comparative Economic Studies. Published by Elsevier Inc. All rights reserved.