IDEAS home Printed from https://ideas.repec.org/a/nos/voprob/2017i1p25-57.html
   My bibliography  Save this article

Determinants of Expected Return on Higher Education in Moscow

Author

Abstract

Ilya Prakhov - Candidate of Sciences in Economics, Associate Professor, Research Fellow, International Research Laboratory for Institutional Analysis of Economic Reforms, Center for Institutional Studies, National Research University Higher School of Economics. Address: 20 Myasnitskaya St., 101000 Moscow, Russian Federation. E-mail: iprahov@hse.ruBased on the data of cohort longitudinal study Educational and Career Trajectories, factors affecting absolute and relative expected returns on education (ROE) are investigated.Surveys of Moscow students show that academic performance assessed by Unified State Exam (USE) scores is an important predictor of students' salary expectations. Besides, expected ROE also correlates positively with college selectivity. Students in private colleges expect to be paid lower than those in state universities. Social and cultural capital of the family (parental education, number of books at home) may influence salary expectations indirectly, through academic performance. Students from wealthier families expect to have a higher ROE than their disadvantaged peers, and so do boys as compared to girls. Students working part-time expect to be paid higher than non-working students after graduation but anticipate a lower return on investment in relative terms.

Suggested Citation

  • Ilya Prakhov, 2017. "Determinants of Expected Return on Higher Education in Moscow," Voprosy obrazovaniya / Educational Studies Moscow, National Research University Higher School of Economics, issue 1, pages 25-57.
    • Handle: RePEc:nos:voprob:2017:i:1:p:25-57
    as

    Download full text from publisher

    File URL: https://vo.hse.ru/data/2017/05/19/1172224297/Prakhov%20EN.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Walter W. McMahon & Alan P. Wagner, 1981. "Expected Returns to Investment in Higher Education," Journal of Human Resources, University of Wisconsin Press, vol. 16(2), pages 274-285.
    2. Botelho, Anabela & Pinto, Ligia Costa, 2004. "Students' expectations of the economic returns to college education: results of a controlled experiment," Economics of Education Review, Elsevier, vol. 23(6), pages 645-653, December.
    3. Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," NBER Chapters, in: Investment in Human Beings, pages 9-49, National Bureau of Economic Research, Inc.
    4. Luis Fernando Gamboa & Paul Andrés Rodríguez-Lesmes, 2018. "Subjective Earnings and Academic Expectations of Tertiary Education in Colombia," Revista ESPE - Ensayos sobre Política Económica, Banco de la Republica de Colombia, vol. 36(86), pages 159-177, June.
    5. Jappelli, Tullio & Pistaferri, Luigi, 2000. "Using subjective income expectations to test for excess sensitivity of consumption to predicted income growth," European Economic Review, Elsevier, vol. 44(2), pages 337-358, February.
    6. Sequeira, Sandra & Spinnewijn, Johannes & Xu, Guo, 2016. "Rewarding schooling success and perceived returns to education: Evidence from India," Journal of Economic Behavior & Organization, Elsevier, vol. 131(PA), pages 373-392.
    7. Abdoulaye Diagne & Bity Diene, 2011. "Estimating Returns to Higher Education: A Survey of Models, Methods and Empirical Evidence"," Post-Print halshs-00914579, HAL.
    8. Jacklin, Charles J & Bhattacharya, Sudipto, 1988. "Distinguishing Panics and Information-Based Bank Runs: Welfare and Policy Implications," Journal of Political Economy, University of Chicago Press, vol. 96(3), pages 568-592, June.
    9. Wolter, Stefan C. & Zbinden, André, 2001. "Rates of Return to Education: The View of Students in Switzerland," IZA Discussion Papers 371, Institute of Labor Economics (IZA).
    10. Abdoulaye Diagne & Bity Diene, 2011. "Estimating Returns to Higher Education: A Survey of Models, Methods and Empirical Evidence," Journal of African Economies, Centre for the Study of African Economies, vol. 20(suppl_3), pages -132, August.
    11. Giorgio Brunello & Claudio Lucifora & Rudolf Winter-Ebmer, 2004. "The Wage Expectations of European Business and Economics Students," Journal of Human Resources, University of Wisconsin Press, vol. 39(4).
    12. Gustman, Alan L & Stafford, Frank P, 1972. "Income Expectations and the Consumption of Graduate Students," Journal of Political Economy, University of Chicago Press, vol. 80(6), pages 1246-1258, Nov.-Dec..
    13. Dominitz, Jeff, 2001. "Estimation of income expectations models using expectations and realization data," Journal of Econometrics, Elsevier, vol. 102(2), pages 165-195, June.
    14. Rainer, Helmut & Siedler, Thomas, 2008. "Subjective income and employment expectations and preferences for redistribution," Economics Letters, Elsevier, vol. 99(3), pages 449-453, June.
    15. Nerlove, Marc & Bessler, David A., 2001. "Expectations, information and dynamics," Handbook of Agricultural Economics, in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 1, chapter 3, pages 155-206, Elsevier.
    16. Henzel, Steffen & Wollmershäuser, Timo, 2008. "The New Keynesian Phillips curve and the role of expectations: Evidence from the CESifo World Economic Survey," Economic Modelling, Elsevier, vol. 25(5), pages 811-832, September.
    17. Dickson, Matt & Harmon, Colm, 2011. "Economic returns to education: What We Know, What We Don’t Know, and Where We Are Going—Some brief pointers," Economics of Education Review, Elsevier, vol. 30(6), pages 1118-1122.
    18. Mark C. Berger, 1988. "Predicted Future Earnings and Choice of College Major," ILR Review, Cornell University, ILR School, vol. 41(3), pages 418-429, April.
    19. Webbink, Dinand & Hartog, Joop, 2004. "Can students predict starting salaries? Yes!," Economics of Education Review, Elsevier, vol. 23(2), pages 103-113, April.
    20. Orazio Attanasio & Katja Kaufmann, 2009. "Educational Choices, Subjective Expectations, and Credit Constraints," NBER Working Papers 15087, National Bureau of Economic Research, Inc.
    21. Steven H. Sandell & David Shapiro, 1980. "Work Expectations, Human Capital Accumulation, and the Wages of Young Women," Journal of Human Resources, University of Wisconsin Press, vol. 15(3), pages 335-353.
    22. Delavande, Adeline & Giné, Xavier & McKenzie, David, 2011. "Measuring subjective expectations in developing countries: A critical review and new evidence," Journal of Development Economics, Elsevier, vol. 94(2), pages 151-163, March.
    23. Eichler, Stefan, 2011. "Exchange rate expectations and the pricing of Chinese cross-listed stocks," Journal of Banking & Finance, Elsevier, vol. 35(2), pages 443-455, February.
    24. Julian R. Betts, 1996. "What Do Students Know about Wages? Evidence from a Survey of Undergraduates," Journal of Human Resources, University of Wisconsin Press, vol. 31(1), pages 27-56.
    25. Robert Jensen, 2010. "The (Perceived) Returns to Education and the Demand for Schooling," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(2), pages 515-548.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ilya Prakhov, 2019. "The Determinants Of Expected Returns On Higher Education In Russia: A Human Capital Theory Perspective," HSE Working papers WP BRP 50/EDU/2019, National Research University Higher School of Economics.
    2. Melnikov, Roman, 2018. "Evaluation of economic consequences of the choice of educational field in modern Russian conditions," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 49, pages 30-56.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ilya Prakhov, 2019. "The Determinants Of Expected Returns On Higher Education In Russia: A Human Capital Theory Perspective," HSE Working papers WP BRP 50/EDU/2019, National Research University Higher School of Economics.
    2. Giovanni Abbiati & Carlo Barone, 2017. "Is university education worth the investment? The expectations of upper secondary school seniors and the role of family background," Rationality and Society, , vol. 29(2), pages 113-159, May.
    3. Pamela Giustinelli, 2022. "Expectations in Education: Framework, Elicitation, and Evidence," Working Papers 2022-026, Human Capital and Economic Opportunity Working Group.
    4. Chadi, Adrian & de Pinto, Marco & Schultze, Gabriel, 2019. "Young, gifted and lazy? The role of ability and labor market prospects in student effort decisions," Economics of Education Review, Elsevier, vol. 72(C), pages 66-79.
    5. Maria Eliophotou Menon & Sofia N. Andreou & Elias Markadjis, 2020. "The expectations of prospective students regarding the economic returns to higher education: Evidence from Cyprus," Cyprus Economic Policy Review, University of Cyprus, Economics Research Centre, vol. 14(1), pages 41-56, June.
    6. Giovanni Abbiati & Carlo Barone, 2015. "Is university education worth the investment? The expectations of upper secondary school seniors and the role of family background," FBK-IRVAPP Working Papers 2015-13, Research Institute for the Evaluation of Public Policies (IRVAPP), Bruno Kessler Foundation.
    7. Xia, Xiaoyu, 2016. "Forming wage expectations through learning: Evidence from college major choices," Journal of Economic Behavior & Organization, Elsevier, vol. 132(PA), pages 176-196.
    8. Luis Fernando Gamboa & Paul Andrés Rodríguez-Lesmes, 2018. "Subjective Earnings and Academic Expectations of Tertiary Education in Colombia," Revista ESPE - Ensayos sobre Política Económica, Banco de la Republica de Colombia, vol. 36(86), pages 159-177, June.
    9. Jones, Sam & Santos, Ricardo, 2022. "Can information correct optimistic wage expectations? Evidence from Mozambican job-seekers," Journal of Development Economics, Elsevier, vol. 159(C).
    10. Stefan Klößner & Gregor Pfeifer, 2019. "The Importance of Tax Adjustments When Evaluating Wage Expectations," Scandinavian Journal of Economics, Wiley Blackwell, vol. 121(2), pages 578-605, April.
    11. Schweri, Juerg & Hartog, Joop, 2017. "Do wage expectations predict college enrollment? Evidence from healthcare," Journal of Economic Behavior & Organization, Elsevier, vol. 141(C), pages 135-150.
    12. Sequeira, Sandra & Spinnewijn, Johannes & Xu, Guo, 2016. "Rewarding schooling success and perceived returns to education: Evidence from India," Journal of Economic Behavior & Organization, Elsevier, vol. 131(PA), pages 373-392.
    13. Kerr, Sari Pekkala & Pekkarinen, Tuomas & Sarvimäki, Matti & Uusitalo, Roope, 2020. "Post-secondary education and information on labor market prospects: A randomized field experiment," Labour Economics, Elsevier, vol. 66(C).
    14. Vaishali Zambre, 2018. "The Gender Gap in Wage Expectations: Do Young Women Trade off Higher Wages for Lower Wage Risk?," Discussion Papers of DIW Berlin 1742, DIW Berlin, German Institute for Economic Research.
    15. Pfeifer, Gregor & Witte, Stefan, 2014. "Students' Wage Expectations in Germany - New Evidence considering Tax Adjusted Estimates," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100354, Verein für Socialpolitik / German Economic Association.
    16. Huntington-Klein, Nick, 2015. "Subjective and projected returns to education," Journal of Economic Behavior & Organization, Elsevier, vol. 117(C), pages 10-25.
    17. Philip Oreopoulos & Ryan Dunn, 2013. "Information and College Access: Evidence from a Randomized Field Experiment," Scandinavian Journal of Economics, Wiley Blackwell, vol. 115(1), pages 3-26, January.
    18. César Alonso-Borrego & Antonio Romero-Medina, 2008. "Students’ Assessment of Higher Education in Spain," Working Papers 2008-31, FEDEA.
    19. John Jerrim, 2015. "Do college students make better predictions of their future income than young adults in the labor force?," Education Economics, Taylor & Francis Journals, vol. 23(2), pages 162-179, April.
    20. Muhammad Qahraman Kakar, 2021. "Ethnic Disparities, Women Education and Empowerment in South Asia," Erudite Ph.D Dissertations, Erudite, number ph21-01 edited by Manon Domingues Dos Santos, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nos:voprob:2017:i:1:p:25-57. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Marta Morozova (email available below). General contact details of provider: http://vo.hse.ru/en/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.