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Investment in Human Capital under Economic Transformation in Russia

Author

Listed:
  • Nesterova Daria
  • Sabirianova Klara
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.

Suggested Citation

  • Nesterova Daria & Sabirianova Klara, 1998. "Investment in Human Capital under Economic Transformation in Russia," EERC Working Paper Series 99-04e, EERC Research Network, Russia and CIS.
    • Handle: RePEc:eer:wpalle:99-04e
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. Sabirianova, Klara Z., 2002. "The Great Human Capital Reallocation: A Study of Occupational Mobility in Transitional Russia," Journal of Comparative Economics, Elsevier, vol. 30(1), pages 191-217, March.
    2. World Bank, 2003. "The Russian Labor Market : Moving from Crisis to Recovery," World Bank Publications - Books, The World Bank Group, number 15007.
    3. Andrew Clark, 2000. "The Returns and Implications of Human Capital Investment in a Transition Economy: An Empirical Analysis for Russia 1994-1998," CERT Discussion Papers 0002, Centre for Economic Reform and Transformation, Heriot Watt University.

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    More about this item

    Keywords

    human capital; earnings function; returns to education; returns to experience; age-earnings-education profiles; labor market flows; unemployment; transition economy;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • P24 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - National Income, Product, and Expenditure; Money; Inflation
    • P52 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies

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