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Returns to Schooling in Kazakhstan: OLS and Instrumental Variables Approach


  • Arabsheibani, Reza

    () (London School of Economics)

  • Mussurov, Altay

    () (KIMEP)


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.

Suggested Citation

  • Arabsheibani, Reza & Mussurov, Altay, 2006. "Returns to Schooling in Kazakhstan: OLS and Instrumental Variables Approach," IZA Discussion Papers 2462, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp2462

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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 0805, Nanyang Technological University, School of Social Sciences, Economic Growth Centre.
    2. Karolina Goraus & Joanna Tyrowicz & Lucas van der Velde, 2017. "How (Not) to Make Women Work?," GRAPE Working Papers 1, GRAPE Group for Research in Applied Economics.
    3. Beatriz Muriel Hernández, 2016. "An Analysis of Firm Characteristics as Earnings Determinants: The Urban Bolivia Case," Development Research Working Paper Series 04/2016, Institute for Advanced Development Studies.

    More about this item


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

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • 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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