Returns to Schooling in Kazakhstan: OLS and Instrumental Variables Approach
Reza (Gholamreza) Arabsheibani () and
Altay Mussurov ()
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Altay Mussurov: KIMEP
No 2462, IZA Discussion Papers from Institute of Labor Economics (IZA)
Abstract:
This paper examines rates of return to schooling in Kazakhstan using OLS and instrumental variable (IV) methodologies. We use spouse’s education and smoking as instruments. We find that spouse’s education is a valid instrument and that conventional OLS estimates that assume the exogenous nature of schooling, and hence do not control for endogeneity bias, may underestimate the true rates of return. The results indicate that the returns to schooling in Kazakhstan have increased with transition. This may reflect the relative scarcities of highly educated people in Kazakhstan with human capital that employers require and, following the market reforms, reward accordingly.
Keywords: rate of return to education; instrumental variables; human capital (search for similar items in EconPapers)
JEL-codes: C13 I21 J24 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2006-11
New Economics Papers: this item is included in nep-edu, nep-hrm and nep-tra
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Citations: View citations in EconPapers (9)
Published - published in: Economics of Transition, 2007, 15 (2), 342-364
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Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp2462
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