Importance The article quantifies individual and budget efficiency of investment in higher and secondary vocational education under modern Russian conditions. Objectives The purpose of the study is to evaluate the long-term impact of field-specific higher and secondary vocational education on students and the State budget. Methods The study draws on methods of cost-benefit analysis of higher and secondary vocational education and regression analysis of the Russia Longitudinal Monitoring Survey data. Results The paper offers an original technique to assess individual and budget efficiency of investment in field-specific higher and secondary vocational education based on the synthesis of cost-benefit analysis and a modified Mincer earnings regression model. I developed regression models to estimate financial benefits of obtaining higher and secondary vocational education under modern Russian conditions, and calculated the return on investment in education for students and the State budget. Conclusions and Relevance Investment in higher and secondary vocational education are profitable for Russian students and for the Russian State budget, through which the programs are financed. Higher education enables Russian young people to significantly increase their human capital and long-term competitiveness in the labor market, as compared to secondary vocational education. As for the Russian State budget, the return on investment in secondary vocational training is bigger. Therefore, the financing of secondary vocational training programs should receive high priority within the structure of government expenditure on education.
Shultz T.W. Investment in Human Capital. The American Economic Review, 1961, vol. 51, no. 1, pp. 1–17.
Schultz T.W. The Economic Value of Education. N.Y., Columbia University Press, 1963.
Becker G.S. Investment in human capital: A theoretical analysis. Journal of Political Economy, 1962, vol. 70, no. 5, pp. 9–49.
Becker G.S. Human Capital: A Theoretical and Empirical Analysis, with Special Reference to Education. Chicago, University of Chicago Press, 1993.
Mincer J. Investment in human capital and personal income distribution. Journal of Political Economy, 1958, vol. 66, no. 4, pp. 281–302. doi: 10.1086/258055
Mincer J. Human capital and the labor market. A review of current research. Educational Researcher, 1989, vol. 18, no. 4, pp. 27–34.
Heckman J.J., Lochner L.J., Todd P.E. Earnings functions and rates of return. Journal of Human Capital, 2008, vol. 2, no. 1, pp. 1–31.
Mankiw N.G., Romer D., Weil D.N. A contribution to the empirics of economic growth. The Quarterly Journal of Economics, 1992, vol. 107, no. 2, pp. 407–437.
Barro R.J. Education and economic growth. Annals of Economics and Finance, 2013, vol. 14, iss. 2, pp. 301–328.
Psacharopoulos G. Returns to investment in education: A global update. World Development, 1994, vol. 22, no. 9, pp. 1325–1343.
Psacharopoulos G., Patrinos H.A. Returns to investment in education: A further update. Education Economics, 2004, vol. 12, no. 2, pp. 111–134. doi: 10.1080/0964529042000239140
Jorgenson D.W., Fraumeni B.M. The Accumulation of Human and Non-human Capital, 1948–1984. In: R.E. Lipsey, H.S. Tice (eds). The Measurement of Savings, Investment and Wealth. Chicago, The University of Chicago Press, 1989.
Jorgenson D.W., Fraumeni B.M. The Output of the Education Sector. In: Z. Griliches (ed.). Output Measurement in the Service Sector. Chicago, The University of Chicago Press, 1992.
Lemieux T. Occupations, field of study and returns to education. Canadian Journal of Economics, 2014, vol. 47, iss. 4, pp. 1047–1077. doi: 10.1111/caje.12116
Denisova I.A., Kartseva M.A. [A premium for a degree in engineering: An estimation of returns to the field-specific education in Russia]. Prikladnaya ekonometrika = Applied Econometrics, 2007, no. 1, pp. 30–57. (In Russ.)
Roshchin S.Yu., Rudakov V.N. [The effect of university quality on graduates' wages]. Voprosy Ekonomiki, 2016, no. 8, pp. 74–95. (In Russ.)
Rudakov V.N., Chirikov I.S., Roshchin S.Yu., Drozhzhina D.S. [The impact of academic achievement on starting wages of Russian university graduates]. Voprosy Ekonomiki, 2017, no. 3, pp. 77–102. (In Russ.)
Kapelyushnikov R.I. [Russia's human capital: What is it worth?]. Voprosy Ekonomiki, 2013, no. 1, pp. 27–47, no. 2, pp. 24–46. (In Russ.)
Belyakov S.A., Klyachko T.L. Metodologiya otsenki vklada obrazovaniya v sotsial'no-ekonomicheskoe razvitie Rossiiskoi Federatsii i ee sub" ektov [Methodology for assessing the contribution of education to the socio-economic development of the Russian Federation]. Moscow, Delo Publ., 2015, 60 p.
Belyakov S.A., Klyachko T.L. Otsenka vklada vysshego i srednego professional'nogo obrazovaniya v ekonomiku rossiiskikh regionov [Assessment of the contribution of higher and secondary vocational education to the economy of the Russian Federation and its constituent entities]. Moscow, Delo Publ., 2016, 82 p.
Bozhechkova A.V. [Econometric modeling of the impact of human capital on economic growth in Russian regions]. Audit i finansovyi analiz = Audit and Financial Analysis, 2013, no. 1, pp. 90–99. (In Russ.)