Comparative Analysis of Educational Attainment in Transition Economies

The project compared several indicators of educational attainment across various groups of transition economies, and between transition economies and others. The indicators of education reflected both the quantity of schooling (e.g. average years of schooling, percentage not attending school at all, and adult literacy rates) and schooling quality (e.g. public expenditure on education, pupil-teacher ratios, repetition rates, dropout rates, and international test scores). The basic test used in the project was a t-test on differences in sample means. Among the transition economies, the indicators examined were most favourable for central European, high-income and advanced transition countries, although the differences between these countries and the remaining transition countries were not usually statistically significant. When compared with other world economies, the transition countries typically showed significantly better indicators than developing countries, but differences between transition and developed countries were not statistically significant. The project also examined the behaviour of the correlation coefficient between indicators of education and income, which, as expected, were usually positive.

The Retirement Behaviour of Older Workers in Transitional Economies

Research has shown that public pay-as-you-go, defined-benefit pension plans penalise those who stay at work beyond a certain age by reducing the present discounted value of future retirement benefits. In discussions on the effectiveness of policies aimed at eliminating the age-dependency factor in workers' decisions to retire, it is often assumed either that the benefits in all future periods have the same weight in the present discounted value or that the discount rate is close to unity due to low real interest rates used in this case. Galuscak first considered the U.S. pension scheme, showing that discounting plays a crucial role since the formula for the present discounted value of future retirement benefits is sensitive to the discount rate used. He then analysed the role of social security incentives and retirement provisions on older workers' behaviour in the labour markets of the Czech and Slovak Republics and the effect of the macroeconomic environment on workers' decisions to retire. He calculated the optimal parameters of the Czech and Slovak pension rules and assessed the potential effectiveness of changes to the Czech scheme introduced in January 1996.