Returns to Education in the Russian Federation: Some New Estimates

This paper presents new estimates of the returns to education in the Russian Federation using data from 1994 to 2018. Russia is a highly educated country,and the level schooling continues to increase. More than one-third of the labor force possesses a post-secondary qualification. Our analysis confirms previous studies showing a growth in the overall returns to schooling during the post-transition period. Although the returns to schooling increased for a time, they are now much lower than the global average. Private returns to education are three times greater for higher education compared with vocational education, and the returns to education for females are higher than for males. Returns for females show an inverse U-shaped curve over the past two decades. To control for endogeneity, we also present the estimates of the returns to schooling using instrumental variables, na­mely, parental socio-economic status and regional dummies. The causal estima­tes present a much higher rate of return, at 14 percent for females and 8 percent for males. Female education is a policy priority and there is a need to investigate the labor market relevance of vocational education. Higher education may have reached an expansion limit, and it may be necessary to investigate options for increasing the productivity of schooling.