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Economic Analysis: Theory and Practice

Estimation of return on investment of Master's degree in Russian conditions

Vol. 21, Iss. 4, APRIL 2022

Received: 10 March 2022

Received in revised form: 18 March 2022

Accepted: 2 April 2022

Available online: 28 April 2022


JEL Classification: J24, J28, J31

Pages: 665689


Roman M. MEL'NIKOV Russian Presidential Academy of National Economy and Public Administration (RANEPA), Moscow, Russian Federation


Subject. The article investigates competitive advantages of master's degree holders in the Russian labor market.
Objectives. The aim is to assess the impact of obtaining a master's degree on employment prospects, the match between education and job, the wage levels, and job satisfaction in Russian conditions.
Methods. I performed a regression analysis of panel data of the Russia Longitudinal Monitoring Survey to estimate the ROI of a master's degree. The personal abilities and social capital of the respondent's family are taken into account, using the individual effects of panel regression. The Heckman model is used for correction of self-selection bias.
Results. The paper reveals a significant positive effect of masters degree on reducing the risk of unemployment and improving the match between the education field and job for women. Men with a master's degree get a higher salary compared to those with bachelors degree, but it may be explained by better personal abilities and social capital rather than by formation of skills within the learning process. The master's degree obtained in Russian conditions does not lead to an increase in job satisfaction, which also testifies to incomplete correspondence of competencies formed by masters degree programs with the needs of the labor market.
Conclusions. To increase the return on skills formed by Russian masters degree programs, it is necessary to improve the content of academic programs and increase the role of potential employers in skill formation and implementation, including through the development of basic departments and targeted training models.

Keywords: human capital, returns to education, return on investment (ROI) in education, labor market, Masters degree program


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