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

Abstract

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 master’s 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 bachelor’s 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 master’s degree programs with the needs of the labor market. Conclusions. To increase the return on skills formed by Russian master’s 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.