Estonia, which adopted relatively free labor market policies early in its transition, experienced rapid increases in returns to human capital Ntilde; rising returns to education and rising relative wages for younger educated workers, but declining returns to experience for older workers with...

According to T.W. Schultz, the returns to human capital are highest in economic environments experiencing unexpected price, productivity, and technology shocks that create "disequilibria." In such environments, the ability of firms and individuals to adapt their resource allocations to shocks...