Perceptions of Inequality as a Factor of Investments in Human Capital (an empirical analysis)

Abstract

The article presents the results of the empirical analysis of the relationship between the Russians' perceptions of inequality and their behavior in relation to investments in human capital. Empirical analysis of such a relation is based on the RLMS HSE data. The investments in human capital are operationalized by the expenditures for adult education, and the perceptions of inequality are measured by the subjective degree of fairness of access to higher education, and also by subjective factors of poverty and well-being that population finds most important in contemporary Russian society. The results of the analysis demonstrate that perceptions of inequality held among the population affect their behavior in relation to the adult’s human capital. The population's perception of access to higher education as fair, and the reasons for wealth as meritocratic, leads to a greater propensity to invest in the adults’ human capital. The perception of the causes of wealth as related to the specific parental family support or the institutional environment, which does not meet the principles of equality of opportunity, on the contrary, has a disincentive effect on investment in adult Russians human capital; understanding poverty as a consequence of the current institutional environment specifics in the country works in a similar way. The obtained results demonstrate another consequence of the population's perception of inequality as non-meritocratic (quite typical for Russians in general), affecting the range of possibilities for the implementation of Russia's development vector based on human capital as its driver.