We estimate returns to human capital during communism and the transition using data on 2,284 men in the Czech Republic. We show: (a) extremely low and constant rates of return to education under the communist wage grid and dramatic increases in transition, which do not differ by firm ownership, (b) radical changes in returns to several fields of study and “sheepskin effects” in both regimes, (c) identical wage experience profile in both regimes, (d) similar 1996 returns to human capital obtained in communism and in transition, and (e) changes in the interindustry wage structure. A decomposition of the variance of wages finds individuals' unobservable effects from communism to persist into transition, but most of the variance is due to unobservable effects introduced in the transition.

Do women perform worse than equally able men in stressful competitive settings? We ask this question for competitions with a high payoff—admissions to tuition-free selective universities. With data on an entire cohort of Czech students graduating from secondary schools and applying to universities, we show that, compared to men of similar general skills and subject-of-study preferences, women perform similarly well when competition is less intense, but perform substantially worse (are less likely to be admitted) when applying to very selective universities.