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Returns to Schooling in Kazakhstan: OLS and Instrumental Variables Approach

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  • Arabsheibani, Reza

    ()
    (Swansea University)

  • Mussurov, Altay

    ()
    (KIMEP)

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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Bibliographic 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
Date of revision:
Publication status: published in: Economics of Transition, 2007, 15 (2), 342-364
Handle: RePEc:iza:izadps:dp2462

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

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References

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

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