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Returns to Schooling in Kazakhstan: OLS and Instrumental Variables Approach

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Author Info
G. Reza Arabsheibani () (University of Wales Swansea, WELMERC and IZA Bonn)
Altay Mussurov () (KIMEP)

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Abstract

This paper examines rates of return to schooling in Kazakhstan using OLS and instrumental variable (IV) methodologies. We use spouse’s education and smoking as instruments. We find that spouse’s education is a valid instrument and that conventional OLS estimates that assume the exogenous nature of schooling, and hence do not control for endogeneity bias, may underestimate the true rates of return. The results indicate that the returns to schooling in Kazakhstan have increased with transition. This may reflect the relative scarcities of highly educated people in Kazakhstan with human capital that employers require and, following the market reforms, reward accordingly.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2462.

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Length: 35 pages
Date of creation: Nov 2006
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Handle: RePEc:iza:izadps:dp2462

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Related research
Keywords: human capital; instrumental variables; rate of return to education;

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Find related papers by JEL classification:
C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Estimation
I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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    Other versions:
  2. Halvorsen, Robert & Palmquist, Raymond, 1980. "The Interpretation of Dummy Variables in Semilogarithmic Equations," American Economic Review, American Economic Association, vol. 70(3), pages 474-75, June. [Downloadable!] (restricted)
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  10. Victor R. Fuchs, 1982. "Time Preference and Health: An Exploratory Study," NBER Working Papers 0539, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  15. Hunt, Jennifer, 1998. "The Transition in East Germany: When is a Ten Point Fall in the Gender Wage Gap Bad News?," CEPR Discussion Papers 1805, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  16. Filer, Randall K. & Jurajda, Stepan & Planovsky, Jan, 1999. "Education and wages in the Czech and Slovak Republics during transition," Labour Economics, Elsevier, vol. 6(4), pages 581-593, November. [Downloadable!] (restricted)
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  18. Fersterer, Josef & Winter-Ebmer, Rudolf, 2003. "Smoking, discount rates, and returns to education," Economics of Education Review, Elsevier, vol. 22(6), pages 561-566, December. [Downloadable!] (restricted)
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  19. Gorodnichenko, Yuriy & Peter, Klara Sabirianova, 2004. "Returns to Schooling in Russia and Ukraine: A Semiparametric Approach to Cross-Country Comparative Analysis," IZA Discussion Papers 1325, Institute for the Study of Labor (IZA). [Downloadable!]
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  20. William N. Evans & Edward Montgomery, 1994. "Education and Health: Where There's Smoke There's an Instrument," NBER Working Papers 4949, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  21. Ariane Pailhé, 2000. "Gender Discrimination in Central Europe during the Systemic Transition," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 8(2), pages 505-535, July. [Downloadable!] (restricted)
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  24. Pencavel, John, 1998. "Assortative Mating by Schooling and the Work Behavior of Wives and Husbands," American Economic Review, American Economic Association, vol. 88(2), pages 326-29, May. [Downloadable!] (restricted)
  25. Gregory, Paul R & Kohlhase, Janet E, 1988. "The Earnings of Soviet Workers: Evidence from the Soviet Interview Project," The Review of Economics and Statistics, MIT Press, vol. 70(1), pages 23-35, February. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Chris SAKELLARIOU, 2008. "Demand for Skills, Supply of Skills and Returns to Schooling in Cambodia," Economic Growth centre Working Paper Series 0805, Nanyang Technolgical University, School of Humanities and Social Sciences, Economic Growth centre. [Downloadable!]
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