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Estimating the Effect of Higher Education on an Employee’s Wage

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  • B. S. Potanin

    (National Research University Higher School of Economics)

Abstract

This paper proposes a new method for estimating the effect of education on an employee’s wage: with the help of the generalized Heckman model with switching. Application of this method makes it possible to avoid the selection bias due to the endogenous accounting for nonrandom consideration of individuals both as employed and having higher education. This model makes it possible to estimate whether it is worthwhile for an individual to get a higher education in terms of changes in their expected income. Analysis of the distribution of the effect of the education level on wages among employees makes it possible to evaluate the efficiency of the higher education system in providing the population with skills and competencies that are significant in the labor market.

Suggested Citation

  • B. S. Potanin, 2019. "Estimating the Effect of Higher Education on an Employee’s Wage," Studies on Russian Economic Development, Springer, vol. 30(3), pages 319-326, May.
    • Handle: RePEc:spr:sorede:v:30:y:2019:i:3:d:10.1134_s1075700719030146
    DOI: 10.1134/S1075700719030146
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    Cited by:

    1. Kossova, Elena & Potanin, Bogdan, 2022. "Estimation of Gaussian multinomial endogenous switching model," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 67, pages 121-143.
    2. Dolgikh, Sofiia & Potanin, Bogdan, 2022. "Estimating the effect of higher education on abortion," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 68, pages 117-139.
    3. Kossova, Elena & Kupriianova, Liubov & Potanin, Bogdan, 2020. "Parametric and semiparametric multivariate sample selection models estimators’ accuracy: Comparative analysis on simulated data," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 57, pages 119-139.

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