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on Confederation of Independent States |
| By: | Alexander Muravyev |
| Abstract: | The paper tests for the existence of human capital externalities, more precisely those stemming from higher education, using a micro-level approach: the Mincerian wage regression augmented with the average level of education in a local geographical area (city). To solve identification problems arising due to endogeneity of average education the study exploits a natural experiment provided by the process of economic transition in the former communist economies. We argue that the educational structure of cities under the central planning was determined by the government rather than the market; thus the average educational attainment in cities at the end of communism can be regarded as exogenous with respect to the wages prevailing after the start of transition. The identification strategy based on the use of the pre-transition average education is applied to data from the Russia Longitudinal Monitoring Survey, RLMS. Empirical results are consistent with the presence of significant human capital (educational) externalities in the Russian economy. According to the estimates, one percent increase in the college share in a city results in the increase of city residents' wages by about 1.5 percent. The result proves to be robust to several changes in the empirical specification. |
| Keywords: | Human Capital Externalities, Cities, Russia |
| JEL: | I2 J31 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp629&r=cis |
| By: | Karas, Alexei (BOFIT); Pyle, William (BOFIT); Schoors, Koen (BOFIT) |
| Abstract: | Using a database from post-communist, pre-deposit-insurance Russia, we demonstrate the presence of quantity-based sanctioning of weaker banks by both firms and households, particularly after the financial crisis of 1998. Evidence for the standard form of price discipline, however, is notably weak. We estimate the deposit supply function and show that, particularly for poorly capitalized banks, interest rate increases exhibit diminishing, and eventually negative, returns in terms of deposit attraction. These findings are consistent with depositors interpreting the deposit rate itself as a complementary proxy of otherwise unobserved bank-level risk. |
| Keywords: | market discipline; deposit market; transition; Russia |
| JEL: | G21 O16 P20 |
| Date: | 2006–10–26 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofitp:2006_013&r=cis |