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What drives students’ salary expectations? New evidence from Russia

A new paper “The determinants of expected returns on higher education in Russia: A human capital theory approach” by CInSt Senior Research Fellow Ilya Prakhov was published in Higher Education Quarterly.

What drives students’ salary expectations? New evidence from Russia

Abstract
This paper evaluates the determinants of the value of investment in higher education (absolute expected returns from higher education) among students of Russian universities, accounting for variations in the socio‐economic development of different Russian regions. Based on the longitudinal study, ‘Trajectories in Education and Careers’, it shows that the average salary in a region is positively related to the individual estimates of expected salaries after graduation. In general, the results correspond to human capital theory, and confirm the rationality of students’ salary expectations. The expected salary shortly after graduation from university is positively related to the academic achievement demonstrated in the university entrance exam (the Unified State Exam, or USE), full‐time study and prior work experience. Male students expect to receive higher salaries compared to female students. Students who study for free expect lower salaries compared to those students who cover their tuition costs. Indirect influence (through USE results) of the characteristics of students’ schools and of their parents’ education on expected salary was found. In addition, we discovered a direct and indirect relationship between family income and expected salaries after university graduation.

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