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Exploring Educational Attainment and Returns to Education in Select © COPYRIGHT by Sibel Selcuk 2011 ALL RIGHTS RESERVED DEDICATION I dedicate this dissertation to my loving family, as I would not have accomplished this work without their love and support, and to my late grandfather, Ekrem Ferdi Sarper, who was my inspiration for pursuing this Ph.D. EXPLORING EDUCATIONAL ATTAINMENT AND RETURNS TO EDUCATION IN SELECT TRANSITION ECONOMIES BY Sibel Selcuk ABSTRACT This dissertation brings together evidence on educational attainment in Bulgaria, Kyrgyzstan and Tajikistan and returns to education in Bulgaria, and explores schooling investment decisions through a qualitative study in Bulgaria. I extend the existing literature to transition economies and examine the trends in the context of countries’ exposure to economic crisis years. Using intergenerational regressions and correlations of educational outcomes of children aged 16 to 20 in relation to parental education, I find that the correlation between children’s and parents’ education is positive and significant, supporting the earlier findings of the intergenerational mobility literature. I show that exposure to crisis coincided with changes in educational attainment for certain groups of children depending on parental education in Bulgaria and Tajikistan, and an appreciable gender gap in terms of persistence of educational outcomes in Bulgaria. With the grade-for-age trajectories, I demonstrate an increasing attainment gap between the children of poorly- educated parents compared to those of more highly-educated parents for children 12 years old and above. ii In the second part, I extend the previous work on returns to education by providing a comprehensive examination of the trends for women and men; different levels of education; and workers at different quantiles of the wage distribution to illustrate which groups are lagging behind in labor market outcomes. Estimating various specifications of the Mincer equation, with ordinary least squares and quantile regressions, I find that while average returns to education increased in Bulgaria in line with the international trends in returns to education, this period was also characterized by a greater disparity in returns to education between workers in lower and higher end of the quantiles of the wage distribution, as well as for different levels of education. In the last part, I explore what factors influence households’ decisions to invest in children’s education using qualitative data collected through fieldwork in Bulgaria in 2005. In line with the theoretical framework for schooling decisions, the interviews highlighted the importance of returns to education, ethnic background, gender and social capital in schooling investment decisions. They also revealed other possible factors, such as children’s ability and quality of schooling. iii ACKNOWLEDGMENTS I would like to express my sincere appreciation to Professor Mieke Meurs, who has supported and motivated me throughout my Ph.D. education. With patience and tolerance she has guided me throughout the dissertation process and kept me on the right track. I would like to thank Professor Thomas Hertz for his continued guidance and support, in particular for his constructive feedback and insights on the methodological issues and for his guidance on STATA programming. I also would like to express my appreciation to Professor Thomas Husted for his valuable feedback and suggestions on the dissertation. I am most obliged to thank the Economics Department for funding my fieldwork in Bulgaria without which this study would not have been possible. I also would like to express my gratitude to Stanka Dobreva, Veska Kouzhouharova and Eugenia Todorova, who assisted me in carrying out the fieldwork in Bulgaria. I cannot thank enough my husband, my daughters, and my mother-in-law for their unconditional love and support in this journey. I am also grateful for the love and encouragement I received from my parents. I also would like to thank other members of my family, including my sister and her family, my grandparents, and my aunt and her family for their support and for believing in me. Last but not least, I am indebted to my colleagues at the United Nations and my dearest friends for their support and encouragement throughout this process. iv TABLE OF CONTENTS ABSTRACT........................................................................................................................ ii ACKNOWLEDGMENTS ................................................................................................. iv LIST OF TABLES............................................................................................................ vii LIST OF ILLUSTRATIONS............................................................................................. ix Chapter 1. INTRODUCTION .............................................................................................. 1 2. INTERGENERATIONAL EDUCATIONAL MOBILITY ............................... 4 Transition and Crisis Years......................................................................... 4 Impact of Transition on Education ........................................................... 10 Evidence on Intergenerational Persistence of Educational Outcomes..... 16 Data and Methods ..................................................................................... 24 Intergenerational Persistence of Educational Outcomes.......................... 30 Discussion................................................................................................. 48 3. RETURNS TO EDUCATION IN BULGARIA............................................... 55 Data and Methods ..................................................................................... 59 Empirical Results and Discussion............................................................. 64 4. QUALITATIVE STUDY IN BULGARIA ...................................................... 74 Fieldwork .................................................................................................. 74 Investment in Schooling ........................................................................... 77 Qualitative Findings.................................................................................. 91 v 5. CONCLUSION................................................................................................. 92 APPENDIX A: REVIEW OF SELECT STUDIES ON INTERGENERATIONAL PERSISTENCE OF EDUCATIONAL OUTCOMES.......................................... 96 APPENDIX B: DATASETS .......................................................................................... 103 APPENDIX C: OVERVIEW OF SURVEYS ................................................................ 104 APPENDIX D: VARIABLE DEFINITIONS................................................................. 106 APPENDIX E : DATA ISSUES..................................................................................... 108 APPENDIX F: SELECT ECONOMIC VARIABLES FOR BULGARIA, KYRGYZSTAN AND TAJIKISTAN................................................................ 109 APPENDIX G: DESCRIPTIVE STATISTICS.............................................................. 112 Appendix H: REGRESSION ESTIMATES OF EQUATION [2].................................. 115 APPENDIX I: QUANTILE REGRESSION RESULTS WITH CONTROL VARIABLES ...................................................................................................... 124 APPENDIX J: FIELDWORK MATERIALS................................................................. 126 REFERENCES ............................................................................................................... 135 vi LIST OF TABLES Table 1. Bulgaria - Exposure to the Crisis (1995-1999)..................................................... 14 2. Kyrgyz - Republic Exposure to the Crisis (1994-2006) ....................................... 14 3. Tajikistan - Exposure to the Crisis (1996-2004)................................................... 15 4. Estimates of the Intergenerational Correlations and Regression Coefficients, Children Aged 16 through 20, 1995 Versus 2003–Bulgaria................................. 32 5. Estimates of the Intergenerational Correlations and Regression Coefficients, Children Aged 16 to 20, 1993 Versus 1998–Kyrgyzstan ..................................... 34 6. Estimates of the Intergenerational Correlations and Regression Coefficients, Children Aged 16 to 20, 1999 Versus 2007–Tajikistan........................................ 35 7: Summary of Estimates of the Intergenerational Correlations and Regression Coefficients for Bulgaria, Kyrgyzstan and Tajikistan .......................................... 49 8. Descriptive Statistics............................................................................................. 63 9. OLS Regression Results ....................................................................................... 65 10. Quantile Regression Results (1995)...................................................................... 66 11. Quantile Regression Results (2003)...................................................................... 67 12. Statistical Significance of Differences in Quantile Regression Coefficients for 1995 and 2003....................................................................................................... 67 13. Returns to education by level................................................................................ 69 14. OLS Regression Results for Women and Men....................................................
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