Human Capital Externalities Evidence from the Transition Economy of Russia

29 Pages Posted: 16 Jun 2008

See all articles by Alexander Muravyev

Alexander Muravyev

Saint Petersburg Branch National Research University Higher School of Economics; Institute for the Study of Labor (IZA)

Abstract

The paper tests for the existence of human capital externalities using a micro-level approach: the Mincerian wage regression augmented with the average level of education in cities. To solve identification problems arising from the endogeneity of average education, the study exploits a natural experiment provided by the process of economic transition: average education at the end of communism can be seen as exogenous in respect of wages prevailing after the start of transition. Our empirical results based on the RLMS data show that a 1 percentage point increase in the share of city residents with a university degree results in an increase of wages of city residents by about 1 percent.

Suggested Citation

Muravyev, Alexander, Human Capital Externalities Evidence from the Transition Economy of Russia. Economics of Transition, Vol. 16, Issue 3, pp. 415-443, July 2008, Available at SSRN: https://ssrn.com/abstract=1144909 or http://dx.doi.org/10.1111/j.1468-0351.2008.00330.x

Alexander Muravyev (Contact Author)

Saint Petersburg Branch National Research University Higher School of Economics ( email )

Kantemirovskaya str. 3a
St. Petersburg, 194000
Russia

HOME PAGE: http://https://www.hse.ru/en/org/persons/127811036

Institute for the Study of Labor (IZA) ( email )

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Bonn, D-53113
Germany

HOME PAGE: http://www.iza.org/en/webcontent/index_html

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