The Educated Russian's Curse: Returns to Education in the Russian Federation
AbstractThis paper uses the only representative sample of the Russian Federation, the Russian Longitudinal Monitoring Survey, to estimate the returns to education in this ex-communist country. This is one of the first studies to tackle this classic issue in labor economics with the realistic expectation of obtaining results for Russia comparable in quality and reliability to those available in developed countries and other economies in transition. Using standard regression techniques we find that the returns to education in Russia are quite low compared with those reported in the literature on countries throughout the world, in almost no specification reaching higher than 5\%. Moreover, there is virtually no improvement in returns to education in the 1992-99 period, a result somewhat at odds with the suggestion of several studies using Russian data from the early 1990s. When we instrument our main regressor using policy experiments from the 1960s, we find comparable results. We also perform a selectivity correction and discover even lower returns to education for men, although they become slightly higher for women. Additionally, we find extremely low returns to tenure, which can even become negative in certain specifications. These results present a bleak perspective for educated Russians, with negative implications for investments in education at all levels, auguring the imminent erosion of one of Russia's few assets not yet completely devalued, the human capital of its citizens.
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Bibliographic InfoPaper provided by Stony Brook University, Department of Economics in its series Department of Economics Working Papers with number 00-05.
Length: 38 pages
Date of creation: 2000
Date of revision:
Returns to Education; Russia; Economic Transition; Instrumental Variables; Selectivity Correction;
Find related papers by JEL classification:
- I2 - Health, Education, and Welfare - - Education
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- O52 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Europe
- P2 - Economic Systems - - Socialist Systems and Transition Economies
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