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Does education or underlying human capital explain liberal economic attitudes?

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  • John V.C. Nye

    ()
    (George Mason University, Department of Economics.)

  • Sergiy Polyachenko

    ()
    (National Research University Higher School of Economics, Center for Institutional Studies. Junior Research Fellow)

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    Abstract

    There is a worldwide tendency for more educated people to trust in markets, private business, and trade, and to distrust government regulation and public provision relative to the less educated even in countries where people generally favor regulation (Aghion, et al. 2010). Individual survey data drawn from the Russian RMLS indicate that for Russia, as for most of the world, respondents with higher levels of education are more likely to trust private businesses and privatization, to distrust government regulation, and to favor lesser provision of services by the State (vs. the private sector). This matches the macro survey findings of Aghion et al. (2010) for the transition economies and the work of Caplan (2001, 2002, 2007). However, it is not clear whether education is a causal factor in these preferences or whether education is proxying for different levels of cognitive ability, health, or other forms of human capital. We use individual height data as instruments for formal education to remove the contemporaneous effects of schooling itself on the education-trust link. We find that this IV estimation leaves us with clear and persistent links between education and market friendly attitudes in Russia. This human capital effect is also quite independent of the role of age in determining liberal attitudes and is not simply a cohort effect. This seems to conform to the worldwide observation that – whatever the independent changing institutions – greater health and cognitive ability seem to promote market liberal beliefs in and of themselves. In contrast, socially liberal attitudes are not correlated with education in the IV regressions

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    Bibliographic Info

    Paper provided by National Research University Higher School of Economics in its series HSE Working papers with number WP BRP 40/EC/2013.

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    Length: 13 pages
    Date of creation: 2013
    Date of revision:
    Publication status: Published in WP BRP Series: Economics / EC, November 2013, pages 1-13
    Handle: RePEc:hig:wpaper:40/ec/2013

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    Keywords: Non-cognitive abilities; human capital; IV; trust; market liberal preferences; Russia;

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    1. Caplan, Bryan, 2001. "What Makes People Think Like Economists? Evidence on Economic Cognition from the "Survey of Americans and Economists on the Economy."," Journal of Law and Economics, University of Chicago Press, vol. 44(2), pages 395-426, October.
    2. Thomas S. Dee, 2003. "Are There Civic Returns to Education?," NBER Working Papers 9588, National Bureau of Economic Research, Inc.
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