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LIFELONG EDUCATION IN RUSSIA:
HUMAN CAPITAL INVESTMENT TRENDS AND ITS EFFICIENCY
D. V. Didenko
During the period of economic boom of 2000s we observed the growth of governmental and total (including non-governmental) expenditures on education in Russia (Table 1). Moreover, the level of investment (both public and private) in human capital was recovering somewhat faster than in physical capital.
Table 1
The investment dynamics in human and physical capital 1 2 3
Year Expenditures of the consolidated state budget on education to GDP, % Total expenditures on education to GDP, % Gross investment in physical capital to GDP, %
1996 4.2 4.5% 18.7%
1997 4.8 5.3% 17.5%
1998 3.8 4.4% 15.5%
1999 3,1 3.6% 13.9%
2000 2.9 3.5% 15.9%
2001 3.1 3.7% 16.8%
2002 3.8 4.5% 16.3%
2003 3.6 4.3% 16.6%
2004 3.5 4.2 16.8%
2005 3.7 4.4 16.7
2006 3.9 4.6 17.6
2007 4.0 4.8 20.2
2008 4.0 4.7 21.2
2009 4.6 5.4 20.3
2010 4.2 5.0 20.4
Growth as compared to min. 55.2 53.1 45.9
Calculated based on Rosstat1, Federal Treasury2, and Higher School of Economics3 dats
1 http://www.gks.ru/doc_2010/year10/pril_year10.xls; http://www.gks.ru/free_doc/new_site/business/invest/Inv.xls.
2 http://www.roskazna.ru/reports/cb.html.
3 Бюджетное финансирование образования. Информационный бюллетень. М.: ГУ-ВШЭ, 2005; Образование в Российской Федерации: стат. ежегодн. М.: ГУ-ВШЭ, 2006, 2007, 2010; Экономика образования: итоги мониторинга, 2009; Информационный бюллетень. М.: ГУ-ВШЭ, 2010.
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In terms of funding volumes of public education from the consolidated budget, Russia was in the same group of countries with similar levels of gross domestic product (hereinafter “GDP”) per capita and the index of human capital (hereinafter “HCI”), but it was behind most developed countries1. Taking into account the costs of non-governmental sources and the inclusion of indirect costs of the overall cost of the educational sphere in the Russian Federation at the beginning of economic recovery (5.5% of GDP in 2002) came in line with the average level (according to median of 5.5% of GDP in 2001), and even somewhat higher than the level of some developed countries (the average level of the median in 2001 was 5.9% of GDP)2.
With the emergence of post-industrial intelligent-driven economy the accumulation of human capital is mostly being implemented not only in standard multi-stage forms of education, but also in a variety of formal and informal practices of Lifelong Professional Education (hereinafter “LPI”), learning at home and at work, which is reflected in modern literature as the concept of “lifelong education”. Reducing the life cycle of economically valuable knowledge in the post-industrial economy, information society and the growth of intersectoral labor mobility enhances feedback between the markets for educational services and labor markets. This results in the fact that the transition to the postindustrial society with the leading development of “knowledge economy” LPI becomes the key element of lifelong education. In this regard, the most important trend in industrialized countries is increasing participation of adults in further training and retraining3.
The intensity of the transformation processes in the ideological, economic, social and political spheres of Russia in the late 1980s-early 2000s stimulated a sharp increase in the mobility of human capital. According to the study based on the most large and representative panel survey of households (Economic situation and health monitor the of the Russian population, Higher School of Economics) 1 2 3 4 in 1991-1998 about 42% of employees changed their professions 2 times more frequently than during the attempts of evolutionary changes (1985-1990) 5. At the same time, our calculations are based on Higher School of Economics research have confirmed the information from other sources6 that during the economic boom in Russia there was a trend opposite to typical post-industrial countries in educational modernization: instead of increasing the participation of economically active people in supplemental educational practices, there was a decrease of core
1 Доклад о развитии человека 2010. Реальное богатство народов: пути к развитию человека. М.: Издательство «Весь Мир», 2010. P. 202-205; Global Education Digest 2010: Comparing Education Statistics Across the World. Montreal: UNESCO Institute for Statistics, 2010. P. 212-221.
2 Агранович М.Л., Полетаев А.В., Фатеева А.В. Российское образование в контексте международных показателей. М.: Аспект Пресс, 2005. P. 30, 74.
3 Westat K.K., Creighton K. Participation in Adult Education in the United States: 1998-99. NCES 2000027 rev. November 1999. Washington, DC: Department of Education, National Center for Education Statistics. P. 1.
4 URL:http://www.cpc.unc.edu/projects/rlms-hse, http://www.hse.ru/org/hse/rlms.
5 Sabirianova K.Z. The Great Human Capital Reallocation: A Study of Occupational Mobility in Transitional Russia. Journal of Comparative Economics. 2002. Vol. 30. № 1. P. 197.
6 Затраты семей на образование взрослых. Информационный бюллетень. М.: ГУ-ВШЭ, 2008. С. 15; Затраты семей на образование взрослых в 2006/07 учебном году. Информационный бюллетень. М.: ГУ-ВШЭ, 2009. P. 15; Система дополнительного профессионального образования. URL: http://www.dpo-edu.ru.
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indicators of lifelong professional training . Perhaps this is due to the fact that restructuring of the industry of human capital that took place in Russia in the 1990s was sufficient for the successful implementation of export-commodity model of economic growth, and in a relatively weak development of innovative industries the incentive to further investment in human capital of adults were not strong enough.
Our calculations of the income index bonuses received as a result of Lifelong Professional training have shown that the income of those who originally had LPI grew faster than with those hadn’t been trained (Table 2).1 2 When viewed on an annualized basis the levels of individual benefit from lifelong professional education shows extremely high values that are several times higher than typical levels from traditional forms of training. We can observe comparable positive effects of the qualification improvement in the workplace in similar research abroad. On the micro level it confirms the existence of common patterns in the area carried out by professional lifelong education as facilitator of the human capital of the national economy.
Table 2
Index bonuses for Lifelong Professional training of respondents (2001-2008)
Cohort 2001-2002 Х1 Х2 Х3 Х4 Х5 Х6 X
Average nominal bonus, % 22.5 15.4 -5.6 5.9 -10.4 2.6 0.4
Median nominal bonus, % 9.6 8.5 1.6 4.2 12.6 11.3 1.8
Logarithmic nominal bonus, % 22.6 5.9 18.7 -5.1 22.5 58.3 8.0
X1 - a year of professional lifelong training, X2-X6 - correspondingly 1-5 years after professional lifelong training, X - annual average fluctuation of the corresponding index. Calculations are based on RLMS-HS data.
The regression analysis of the combined subsets of students and those not being educated in the course of professional lifelong education among different groups of respondents also showed that training led to a noticeable but statistically insignificant increase of individual income. Setting a question about the factors that determine the subsequent success or failure in obtaining economic benefits from training in Lifelong Professional Education, we discovered that the most powerful of them is specialty training. Among the students in Lifelong Professional Education the share of successfully employed is higher and the index premium for Lifelong Professional Education is much higher and more evenly distributed among those who were educated for new industry areas in Russia (office clerks, service industry)3. On the one hand, it indicates the presence of incentives for the implementation of structural modernization of the Russian economy on the microeconomic level, on the other hand, this confirms the weak efficiency of the Russian labor market, as well as its lack of backward linkages with the market of
1 Диденко Д.В., Дорофеева З.Е., Ключарев Г.А. Некоторые оценки эффективности дополнительного профессионального образования в России (2001-2008) // Мир России. 2011. Т. XX. № 1. P. 126-127.
2 The same. P. 135-136, 138.
3 The same, p. 140-141.
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additional educational services (in the of the equilibrium state the effect of factor would be almost zero).
We have discovered weak dependence of individual results in Lifelong Professional Education on the factors that typically influence the cost-effectiveness of traditional forms of education acting as social constraints for accessing such as the current level of education, the general and specific work experience, gender, type of settlement, place of residence of a student. At the same time, this fact can be interpreted as evidence that Lifelong Professional Education has performed an important modernizing function: it acts as a meritocratic institution that helps select and promote the members of the economically active population according to their abilities. Thus, relatively good results after training in Lifelong Professional Education have shown that those who changed their occupation as a result of training are residents of the Russian province (rural and urban settlements), mostly women. But in contrast to the developed countries the bonus income received as a result of training in Lifelong Professional Education is distributed unevenly and is rated by minority in Russia. The average positive result provides an increased amount of the bonus income from individual “successful” graduates of Lifelong Professional Education, while only a small minority receives the economic benefits of education. To some extent this may be regarded as a demotivating factor for potential recipients of these educational services. 1
The report includes the materials of scientific research conducted within the Russian Humanitarian Science Foundation grant program. (Project № 10-03-0247а).
1 The same. P. 137-138.
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