Essays in Labour Economics and Economics of Education

The dissertation consists of three chapters. Chapter 1 focuses on the returns to education in Hungary and Germany in 2000. The study develops a system for comparison of the German and Hungarian education systems, which can be used in the empirical analysis to compare the returns to education across the two countries in a meaningful way. In the empirical analysis, Mincer earnings equation are estimated using ordinary least squers regression and quantile regression – in order to analyse both within- and between-education-group earnings differentials – using the “Hungarian National Labour Center’s Wage Survey” and the “German Socio-economic Panel”. Furthermore, the returns to different fields of study are estimated for the two countries. It is the analysis of the private-public sector earnings gap in Hungary for the decade of 1994 – 2003 which Chapter 2 of the dissertation proceeds with. This time period is particularly interesting not only from the perspective of transition but also given the minimum wage and public sector wage reforms in the early 2000s. The data is drawn from the “Hungarian National Labour Center’s Wage Survey” in order to examine the evolution of the private-public earnings gap for four groups of full-time male employees distinguished by education and the evolution of the returns to education in the private and public sectors separately. Chapter 3 focuses on the effect of school starting age and socio-economic factors on academic performance for Hungarian grade four students. The data for the empirical analysis is drawn from the “Progress in International Reading and Literacy Study” and the “Trends in Mathematics and Science Study”. In addition to OLS regressions, the study uses the control function approach, proposed by Garen (1984) and Heckman and Robb (1985), exploiting the exogenous variation in school starting age driven by the children’s month of birth and the cut-off date regulation for enrolment