Search

This paper presents new estimates of the returns to education in the Russian Federation. Private returns to education are three times greater for higher education compared to 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. 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.

This paper used institution level information about graduate earnings and estimates of fiscal and private costs to obtain fiscal and private returns to education using an internal rate of return calculation. As data has been collected so far only on earnings trajectories for three years following graduation, these are not lifetime returns, but they are adequate to provide relative estimates. Samara Energy College with private returns of 35 percent and fiscal returns of 13 percent leads the list of colleges. V.R. Fillipova Buryat State Agricultural Academy in Ulan Ude leads the universities list with private returns of 9 percent and fiscal return of 7 percent. Even though only preliminary results are presented here, the data length and model sophistication can only grow in the future. The resulting information on returns to investment will serve government stakeholders as well as individual students.

This paper uses regionally representative household survey data to determine the rates of return to education in different regions. Returns show a wide dispersion together with the labor market context. The paper’s policy recommendations will be particularly helpful to support human capital development of federally targeted economically and socially depressed regions.

This paper explores the topic of depreciation of human capital as a possible explanation for observed trends in the returns to education in the Russian Federation. Estimates of depreciation are presented for various sample groups. Depreciation first decreased and then increased in the period 1994-2018. University educated workers add human capital even after they stop full-time studies; this happens less with vocational graduates.