ECONOMIC GROWTH CENTER

                       YALE UNIVERSITY

                       P.O. Box 208269
                     27 Hillhouse Avenue
                  New Haven, CT 06520-8269

                CENTER DISCUSSION PAPER NO. 770




              MARKETS FOR COMMUNIST HUMAN CAPITAL:
           RETURNS TO EDUCATION AND EXPERIENCE IN THE
                    CZECH REPUBLIC AND SLOVAKIA


                          Robert S. Chase

                          Yale University



                          January 1997



Note: Center Discussion Papers are preliminary materials circulated to
      stimulate discussions and critical comments.  This is a revised version
      of the paper originally written in September 1995.  Dr. Chase was a
      Ph.D. candidate in the Economics Department and is presently an Olin
      Postdoctoral Fellow at the Yale Center for International and Area
      Studies.

      Financial Support for this research was provided by The Mellon
      Foundation Area Studies Grant Program.

      The author thanks Pavel Mahonin, Petr Mateju and Jiri Vecernik for making
      available the micro-data used in this research and T. Paul Schultz,
      Michael Montias Jenny Hunt and three anonymous referees for guidance
      helpful comments.

              MARKETS FOR COMMUNIST HUMAN CAPITAL:
               RETURNS TO EDUCATION AND EXPERIENCE
                IN THE CZECH REPUBLIC AND SLOVAKIA



                            ABSTRACT

   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.








KEY WORDS: Post-Communist Transition, Czech Republic, Slovakia, Returns to
Education, Returns to Experience.