TY  - RPRT
        AU  - Gorodnichenko, Yuriy
AU  - Peter, Klara Sabirianova
        TI  - Returns to Schooling in Russia and Ukraine: A Semiparametric Approach to Cross-Country Comparative Analysis
        PY  - 2004/Sep/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 1325
        UR  - https://www.iza.org/publications/dp1325
        AB  - This study provides the first set of estimates of the returns to schooling over an extended
period in Russia and Ukraine (1985-2002). There has been an increase in returns to
schooling in both countries but the increase is much bigger in Russia than in Ukraine. The
intriguing question is why returns to schooling in Russia and Ukraine diverged so much over
the transition period while the skill composition of employment did not. Our approach in
analyzing the sources of cross-country differences in returns to schooling is to compare the
Mincerian earnings functions between the two countries and then to employ decomposition
techniques. Using semiparametric methods, we construct counterfactual wage distributions
for university and secondary school graduates for Ukraine using the distributions of Russian
characteristics, returns to characteristics, and unobservables. This allows us to decompose
differences in returns to schooling between the two countries due to differences in the labor
market returns (price effect), differences in unobservables (residual effect), and differences in
the labor force composition (composition effect). We conclude that of these three effects the
price effect makes a major contribution to the observed differences in the returns to
schooling.
        KW  - cross-country analysis
KW  - counterfactual
KW  - decomposition
KW  - semiparametric approach
KW  - earnings function
KW  - returns to schooling
KW  - retrospective data
KW  - transition
KW  - Russia
KW  - Ukraine
        ER  -