Skip to main content

Investment in human capital under economic transformation in Russia

Citation

Nesterova, Daria & Sabirianova, Klara Z. (1998). Investment in human capital under economic transformation in Russia. EERC Working Paper Series no. 99-04e.

Abstract

This paper employs the data from Russian Longitudinal Monitoring Survey (RLMS) to study human capital determinants of wage and employment changes from 1992 to 1996. We analyze how returns to schooling are changing over the transition period in Russia. The evidence shows that at the beginning of economic reforms (1992-1994) unconstrained wage setting shifted returns in favor of more educated individuals. But the consequent structural changes along with devaluation of some skills and reduction of supply of skilled jobs lead to a decline in the rates of return to schooling. The returns to experience also tend to decline substantially. Compared with workers of state-owned and privatized companies, workers of new private firms have greater returns to schooling and smaller returns to experience. We also find robust evidence of a strong impact on wages caused by firm–specific and regional characteristics. Among other results, higher education tends to reduce the probability of exit from employment and unemployment.

Reference Type

Journal Article

Year Published

1998

Journal Title

EERC Working Paper Series no. 99-04e

Author(s)

Nesterova, Daria
Sabirianova, Klara Z.