IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Assessing the Returns to Education in Georgia

  • Tamar Khitarishvili

The economic returns to education in transition countries have been extensively evaluated in the literature. The present study contributes to this literature by estimating the returns to education in Georgia during the last transition period 2000-04. We find very low returns to education in Georgia and little evidence of an increasing trend in the returns. This picture contrasts with somewhat higher rates of return to education in the mid-1990s in Georgia and the recent estimates from other transition countries. A further analysis of the shifts in the supply and demand for education sheds light on possible causes. In particular, on the supply side, the decline in the quality of education in the 1990s has negated the improvements in the provision of skills needed by market economies during this period. On the demand side, the expansion of the Georgian economy has taken place in the direction of fields such as public administration and education that employ a highly educated workforce but do not remunerate well. Yet it would be a mistake to conclude that education is not a valuable asset in Georgia. The role of education is largely manifested in its impact on the employability of individuals, an issue that has been overlooked in the transition literature. Once this impact is taken into account, education is shown to play an increasingly important role in influencing the earnings of the working population in Georgia. The paper uses the ordinary least squares approach, instrumental variables approach, and sample selection correction, taking into account conditional and unconditional marginal effects of education on earnings.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.levyinstitute.org/pubs/wp_608.pdf
Download Restriction: no

Paper provided by Levy Economics Institute in its series Economics Working Paper Archive with number wp_608.

as
in new window

Length:
Date of creation: Aug 2010
Date of revision:
Handle: RePEc:lev:wrkpap:wp_608
Contact details of provider: Web page: http://www.levyinstitute.org

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Rivo Noorkoiv & Peter F. Orazem & Allan Puur & Milan Vodopivec, 1998. "Employment and wage dynamics in Estonia, 1989-95," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 6(2), pages 481-503, November.
  2. Patrinos, Harry A. & Sakellariou, Chris, 2011. "Quality of Schooling, Returns to Schooling and the 1981 Vouchers Reform in Chile," World Development, Elsevier, vol. 39(12), pages 2245-2256.
  3. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2007. "Enhanced routines for instrumental variables/GMM estimation and testing," Boston College Working Papers in Economics 667, Boston College Department of Economics, revised 05 Sep 2007.
  4. Lorraine Dearden & Barbara Sianesi, 2001. "Estimating the Returns to Education: Models, Methods and Results," CEE Discussion Papers 0016, Centre for the Economics of Education, LSE.
  5. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2002. "Instrumental variables and GMM: Estimation and testing," United Kingdom Stata Users' Group Meetings 2003 02, Stata Users Group.
  6. Pastore, Francesco & Verashchagina, Alina, 2004. "Private Returns to Human Capital over Transition: A Case Study of Belarus," IZA Discussion Papers 1409, Institute for the Study of Labor (IZA).
  7. Gorodnichenko, Yuriy & Sabirianova Peter, Klara, 2005. "Returns to schooling in Russia and Ukraine: A semiparametric approach to cross-country comparative analysis," Journal of Comparative Economics, Elsevier, vol. 33(2), pages 324-350, June.
  8. Garcia-Mainar, Inmaculada & Montuenga-Gomez, Victor M., 2005. "Education returns of wage earners and self-employed workers: Portugal vs. Spain," Economics of Education Review, Elsevier, vol. 24(2), pages 161-170, April.
  9. Victoria Vernon, 2002. "Human Capital in Transitional Russia," Labor and Demography 0204003, EconWPA.
  10. Brainerd, Elizabeth, 1998. "Winners and Losers in Russia's Economic Transition," American Economic Review, American Economic Association, vol. 88(5), pages 1094-1116, December.
  11. Münich, Daniel & Svejnar, Jan & Terrell, Katherine, 1999. "Returns to Human Capital Under the Communist Wage Grid and During the Transition to a Market Economy," CEPR Discussion Papers 2332, C.E.P.R. Discussion Papers.
  12. Michael P. Murray, 2006. "Avoiding Invalid Instruments and Coping with Weak Instruments," Journal of Economic Perspectives, American Economic Association, vol. 20(4), pages 111-132, Fall.
  13. Aakvik, Arild & Salvanes, Kjell G & Vaage, Kjell, 2003. "Measuring Heterogeneity in the Returns to Education in Norway Using Educational Reforms," CEPR Discussion Papers 4088, C.E.P.R. Discussion Papers.
  14. Fleisher, Belton M. & Peter, Klara Sabirianova & Wang, Xiaojun, 2004. "Returns to Skills and the Speed of Reforms: Evidence from Central and Eastern Europe, China, and Russia," IZA Discussion Papers 1182, Institute for the Study of Labor (IZA).
  15. Robert J. Lemke & Isaac C. Rischall, 2003. "Skill, parental income, and IV estimation of the returns to schooling," Applied Economics Letters, Taylor & Francis Journals, vol. 10(5), pages 281-286, April.
  16. Benedek, Dora & Lelkes, Orsolya, 2009. "The distributional implications of income underreporting in Hungary," MPRA Paper 17308, University Library of Munich, Germany.
  17. Flabbi, Luca & Paternostro, Stefano & Tiongson, Erwin R., 2007. "Returns to education in the economic transition : a systematic assessment using comparable data," Policy Research Working Paper Series 4225, The World Bank.
  18. Gregory, Paul R & Kohlhase, Janet E, 1988. "The Earnings of Soviet Workers: Evidence from the Soviet Interview Project," The Review of Economics and Statistics, MIT Press, vol. 70(1), pages 23-35, February.
  19. Glewwe, Paul, 1996. "The relevance of standard estimates of rates of return to schooling for education policy: A critical assessment," Journal of Development Economics, Elsevier, vol. 51(2), pages 267-290, December.
  20. Psacharopoulos, George & Patrinos, Harry Anthony, 2002. "Returns to investment in education : a further update," Policy Research Working Paper Series 2881, The World Bank.
  21. François Bourguignon & Martin Fournier & Marc Gurgand, 2002. "Selection Bias Correction Based on the Multinomial Logit Model," Working Papers 2002-04, Centre de Recherche en Economie et Statistique.
  22. Ides Nicaise, 2001. "Human capital, reservation wages and job competition: Heckman's lambda re-interpreted," Applied Economics, Taylor & Francis Journals, vol. 33(3), pages 309-315.
  23. Colm Harmon & Hessel Oosterbeek & Ian Walker, 2003. "The Returns to Education: Microeconomics," Journal of Economic Surveys, Wiley Blackwell, vol. 17(2), pages 115-156, 04.
  24. Arrazola, María & de Hevia, José, 2008. "Three measures of returns to education: An illustration for the case of Spain," Economics of Education Review, Elsevier, vol. 27(3), pages 266-275, June.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:lev:wrkpap:wp_608. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Marie-Celeste Edwards)

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.