Abstract
This paper represents the first attempt to employ a long series of repeated cross-sectional data from the Kazakhstani National Statistics as the pseudo-panel for estimating returns to schooling. We found the returns to be relatively high and internationally comparable. The cohort effect turned out to be negative, suggesting the interpretation of the business cycle’s impact. The gender gap in returns has additionally been revealed: while females tend to earn less, the returns are higher for them, which can likely be explained by gender differences in labor allocation across sectors and industries and, in turn, explains the higher levels of education amongst women.
Highlights
The ‘returns to schooling’ concept, as developed by Mincer (1974), was subsequently theoretically enriched and empirically tested in various contexts, and contributed to the evaluation of the economic role of education, labor market conditions and human capital productivity
The aim of this study is to estimate the returns to schooling in Kazakhstan with the use of massive repeated cross-sectional data collected by the Household Budget Survey in 2002–2016, as a synthetic or pseudo-panel
In Kazakhstan, whose independence can be roughly divided into two sub-periods—the severe crisis of the 1990s and the oil boom of the 2000s (Fig. 1)—the later economic growth might have contributed to the increase in returns via several channels
Summary
The ‘returns to schooling (education)’ concept, as developed by Mincer (1974), was subsequently theoretically enriched and empirically tested in various contexts, and contributed to the evaluation of the economic role of education, labor market conditions and human capital productivity. Despite females earning less, their returns to schooling were consistently higher for all models The latter could probably be explained by gender differences in the labor force allocation between industries and sectors, with men mainly employed in market-oriented, riskier, but better paid industries with predominantly private ownership that probably value education less than the public sector and those industries absorbing the female labor force, where a certain level of schooling is often formally required and, rewarded. The following section discusses the theoretical framework, the pseudo-panel methodology and its possible drawbacks, and briefly reviews its previous applications worldwide. It details some of the very few research efforts to examine the returns to schooling in Kazakhstan and the region. The following section discusses the main findings from the estimated models and their possible interpretations in the context of the Kazakhstani labor market, as summarized by the conclusions
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