Subject. I address the impact of higher education expansion in Russia on the income level of economic agents interacting with university graduates of different majors. Objectives. The aim is to test the hypothesis about the existence of externalities of the expansion of higher education in Russian conditions that are characterized by the diminishing return on the increase in the share of economically active population with higher education and the differentiation of the impact of increase in the number of graduates with different educational majors. Methods. To evaluate the external effects of the expansion of higher education in Russia, I performed a regression analysis of the Russian Longitudinal Monitoring Survey data. Results. I revealed a positive external effect of the expansion of higher education in Russia. It decreases as enrollment in higher education increases. In Russia, specialists in the field of law and public administration benefit from the expansion of higher education. The increase in the share of graduates with higher technical education does not produce significant positive external effects due to the structure of the Russian economy and its economic development model, which has a limited demand for competences providing innovative development of industry. Conclusions. Despite the decline in external effects of investment in higher education, the decision to obtain it remains quite rational, as the private return on higher education remains quite high. Improving the external effects of training specialists in technical and natural sciences requires improving the training programs of Russian technical universities and institutional changes.
Keywords: investment in human capital, return on education, external effects, expansion of higher education, higher education bubble
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