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Expansion of Higher Education, Employment and Wages: Evidence from the Russian Transition

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  • Natalia Kyui

Abstract

This paper analyzes the effects of an educational system expansion on labour market outcomes, drawing upon a 15-year natural experiment in the Russian Federation. Regional increases in student intake capacities in Russian universities, a result of educational reforms, provide a plausibly exogenous variation in access to higher education. Additionally, the gradual nature of this expansion allows for estimation of heterogeneous returns to education for individuals who successfully took advantage of increasing educational opportunities. Using simultaneous equations models and a non-parametric model with essential heterogeneity, the paper identifies strong positive returns to education in terms of employment and wages. Marginal returns to higher education are estimated to decline for lower levels of individual unobserved characteristics that positively influence higher education attainment. Finally, the returns to higher education are found to decrease for those who, as a result of the reforms, increasingly pursued higher education.

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  • Natalia Kyui, 2013. "Expansion of Higher Education, Employment and Wages: Evidence from the Russian Transition," Staff Working Papers 13-45, Bank of Canada.
    • Handle: RePEc:bca:bocawp:13-45
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    2. Schultheiss, Tobias & Pfister, Curdin & Gnehm, Ann-Sophie & Backes-Gellner, Uschi, 2023. "Education expansion and high-skill job opportunities for workers: Does a rising tide lift all boats?," Labour Economics, Elsevier, vol. 82(C).
    3. Caner, Asena & Demirel-Derebasoglu, Merve & Okten, Cagla, 2019. "Attainment and Gender Equality in Higher Education: Evidence from a Large Scale Expansion," IZA Discussion Papers 12711, Institute of Labor Economics (IZA).
    4. Elsayed, Ahmed & Shirshikova, Alina, 2023. "The Women Empowering Effect of Higher Education," IZA Discussion Papers 16069, Institute of Labor Economics (IZA).
    5. Leonardo Fabio Morales & Christian Posso & Luz A. Flórez, 2021. "Heterogeneity in the Returns to Tertiary Education for the Disadvantage Youth: Quality vs. Quantity Analysis," Borradores de Economia 1150, Banco de la Republica de Colombia.
    6. Karimi, Seyed M. & Taghvatalab, Golnaz, 2020. "Access to higher education and the likelihood of being married," The Quarterly Review of Economics and Finance, Elsevier, vol. 78(C), pages 22-33.
    7. Lehnert, Patrick & Pfister, Curdin & Backes-Gellner, Uschi, 2020. "Employment of R&D personnel after an educational supply shock: Effects of the introduction of Universities of Applied Sciences in Switzerland," Labour Economics, Elsevier, vol. 66(C).
    8. Deniz Karaoglan & Cagla Okten, 2022. "The effect of parental job loss on youth transition to employment in Turkey," LABOUR, CEIS, vol. 36(2), pages 251-275, June.
    9. Nobuyoshi Kikuchi, 2017. "Marginal Returns to Schooling and Education Policy Change in Japan," ISER Discussion Paper 0996, Institute of Social and Economic Research, Osaka University.
    10. Belskaya, Olga & Peter, Klara Sabirianova & Posso, Christian, 2014. "College Expansion and the Marginal Returns to Education: Evidence from Russia," IZA Discussion Papers 8735, Institute of Labor Economics (IZA).
    11. Harry Patrinos & Suhas Parandekar & Ekaterina Melianova & Artem Volgin, 2020. "Returns to Education in the Russian Federation," World Bank Publications - Reports 33976, The World Bank Group.
    12. Kyui, Natalia & Radchenko, Natalia, 2021. "The changing composition of academic majors and wage dynamics: Beyond mean returns," Journal of Comparative Economics, Elsevier, vol. 49(2), pages 358-381.
    13. Sergey Alexeev, 2023. "Technical change and wage premiums amongst skilled labour: Evidence from the economic transition," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 31(1), pages 189-216, January.
    14. Nobuyoshi Kikuchi, 2017. "Marginal Returns to Schooling and Education Policy Change in Japan," ISER Discussion Paper 0996r, Institute of Social and Economic Research, Osaka University, revised Oct 2017.
    15. Facundo Quiroga‐Martínez & Esteban Fernández‐Vázquez, 2021. "Education as a key to reduce spatial inequalities and informality in Argentinean regional labour markets," Regional Science Policy & Practice, Wiley Blackwell, vol. 13(1), pages 177-189, February.
    16. Qiao Wen, 2022. "Estimating Education and Labor Market Consequences of China’s Higher Education Expansion," Sustainability, MDPI, vol. 14(13), pages 1-25, June.
    17. Elsayed, Ahmed & Shirshikova, Alina, 2023. "The women-empowering effect of higher education," Journal of Development Economics, Elsevier, vol. 163(C).
    18. Krieger, Bastian, 2023. "Heterogeneous regional university funding and firm innovation: An empirical analysis of the German excellence initiative," ZEW Discussion Papers 23-006, ZEW - Leibniz Centre for European Economic Research.
    19. Kyui, Natalia & Radchenko, Natalia, 2020. "The Changing Composition of Academic Majors and Wage Dynamics," IZA Discussion Papers 13591, Institute of Labor Economics (IZA).
    20. Leszek Wincenciak, 2019. "Evolution of private returns to schooling over the business cycle in a transition economy," Working Papers 2019-19, Faculty of Economic Sciences, University of Warsaw.
    21. Gordey Yastrebov, 2021. "The Demographic Echo of War and educational attainment in Soviet Russia," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 45(22), pages 727-768.

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    Keywords

    Development economics; Labour markets;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • I20 - Health, Education, and Welfare - - Education - - - General

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