Estimating the Returns to Higher Education in Russia: Inter-Sectoral Differences

One of the most important factors influencing on the salaries of labor force is the educational level of workers. Statistical data show that there is the positive correlation between individuals’ education and their incomes. Moreover, the wages significantly vary depending on the economic sectors in Russia. It is explained by set of factors. For example, there is the range of economic areas which activity plays a great role for the welfare of country (oil industry, gas production industry and etc.). In these sectors employees have greater salaries then ones in other fields of economy. Also, in some kind of employment the wages perform the compensating function, especially, it concerns the hazardous industry. In contrary, in some cases individuals with the different level of education have the same low incomes. Thus, the problem of differentiation of returns to education in the economic sectors is urgent for both individuals and government. Education is highly correlated with the income. However, in different sectors individuals with the same level of education have not similar wages. Consequently, the returns to education will vary between sectors. One of the reasons of this phenomenon is certain specific of national economy. Also, it is explained by the different demand for highly educated labor in the economic sectors. Thus, the aim of this research is to find and compare the returns to education for different fields of economy. To achieve the aim it is necessary to solve the following research tasks: to estimate the existing inter-sectoral differences in wages; to investigate the degree of influence of workers’ education on differences in wages; to analyze the inter-sectoral differences in salaries depending on work experience; to define the presence of gender factor affecting the returns on education in sectors.