Returns to schooling in Russia and Ukraine: A semiparametric approach to cross-country comparative analysis

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Returns to Schooling in Russia and Ukraine: A Semiparametric Approach to Cross-Country Comparative AnalysisYuriy Gorodnichenko Klara Sabirianova Peter The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit company supported by Deutsche Post World Net. The center is associated with the University of Bonn and offers a stimulating research environment through its research networks, research support, and visitors and doctoral programs. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. This study provides the first set of estimates of the returns to schooling over an extended period in Russia and Ukraine (1985-2002). There has been an increase in returns to schooling in both countries but the increase is much bigger in Russia than in Ukraine. The intriguing question is why returns to schooling in Russia and Ukraine diverged so much over the transition period while the skill composition of employment did not. Our approach in analyzing the sources of cross-country differences in returns to schooling is to compare the Mincerian earnings functions between the two countries and then to employ decomposition techniques. Using semiparametric methods, we construct counterfactual wage distributions for university and secondary school graduates for Ukraine using the distributions of Russian characteristics, returns to characteristics, and unobservables. This allows us to decompose differences in returns to schooling between the two countries due to differences in the labor market returns (price effect), differences in unobservables (residual effect), and differences in the labor force composition (composition effect). We conclude that of these three effects the price effect makes a major contribution to the observed differences in the returns to schooling.JEL Classification: C14, I20, J31, O15, O57, P50

The Russian-Ukrainian Political Divide

“…For a more detailed description of the ULMS see Lehmann, Pignatti, and Wadsworth (2006), Gorodnichenko and Sabirianova (2005), and Ganguli and Terrell (2006 Note: Binary probit model with "1" = pro-Orange and "0" otherwise. The benchmark is a Ukrainian speaking male of Ukrainian nationality preferring a pre-perestroika Soviet-type political and centrally planned economic system.…”

Determinants of Poverty During Transition: Household Survey Evidence from Ukraine

“…Rather than being fixed by the state as in the Soviet period, wages started to reflect individual productivity and effort with gradually increasing returns to human capital (Gorodnichenko and Sabirianova Peter 2005;Munich, Svejnar and Terrell 2005). This resulted in a raising inequality of the wage distribution, driving the rise in income inequality (Keane and Prasad 2002).…”

Assessing the Returns to Education in Georgia

“…Given the unavailability of actual years of education, the years of education are imputed from the data on the levels of education (Gorodnichenko and Sabirianova Peter [2005]; an important exception is Munich, Svejnar, and Terrell [2005]). Experience is proxied by Age-Schooling-6, following a common approach in the literature.…”

“…The research on the former Soviet Union has largely focused on Russia (e.g., Brainerd 1998;Cheidvasser and Benitez Silva 2007;Vernon 2002) and the western republics of the former Soviet Union (e.g., Pastore and Verashchagina [2005] for Belarus; Gorodnichenko and Sabirianova Peter [2005] for Ukraine). Exceptions are Arabsheibani and Mussurov (2007), who analyze the evidence for Kazakhstan, and Anderson and Pomfret (2003), who report the estimates for Kyrgyzstan.…”