Students in majors with higher average quantitative GRE scores are less likely to attend graduate school while students in majors with higher average verbal GRE scores are more likely to attend graduate school. This sorting effect means that students whose cognitive skills are associated with lower earnings at the bachelori¾’s level are the most likely to attend graduate school. As a result, there is a substantial downward bias in estimated returns to graduate education. Correcting for the sorting effect raises estimated annualized returns to a Masteri¾’s or doctoral degree from about 5% to 7.3% and 12.8% respectively. Estimated returns to professional degrees rise from 13.9% to 16.6%. These findings correspond to a large increase in relative earnings received by postgraduate degree holders in the United States over the past 20 years.

The Role of Mathematical and Verbal Skills on the Returns to Graduate and Professional Education

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.

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

Using three household surveys, the Japanese Panel Survey of Consumers (JPSC), the Working Person Survey (WPS), and the Survey of Adult Skills (PIAAC), this study estimates the returns to postgraduate education in Japan, considering potential self-selection bias. To mitigate the bias, workers’ undergraduate majors, types of university, and level of cognitive skills are controlled for. These factors explain 6.3–29.2% of the postgraduate wage premium for women, but at most 10.9% for men. Even after controlling for them, the postgraduate wage premium remains positive and significant, ranging from 16.5 to 23.7% for men and 13.5–26.4% for women.

The returns to postgraduate education in Japan

This study estimates the impact of the dramatic changes in housing prices during Japan's bubble from the late 1980s to the 1990s on households’ asset accumulation and utility over their life cycle. We construct a life-cycle model explaining households’ consumption/saving and housing decisions under collateral and borrowing constraints. We estimate this model using data from the Family Income and Expenditure Survey (FIES), which includes data on households’ housing wealth estimated from objective information. Using the estimated model, we then conduct a counterfactual simulation in which we assume that housing prices remained constant during the bubble period. Doing so allows us to quantify the gains/losses of lifetime utility due to the housing price boom and bust. We find that 72.2% of the households experienced an average decrease in lifetime utility equivalent to 5.7% of lifetime income. On average, Japan's housing price boom and bust caused a loss in lifetime utility equivalent to 4.7% of lifetime income. Moreover, we compare the impact of the housing price bubble across cohorts and find that the impact was greatest for those who experienced the bubble at ages 35–45.

Fumihiko Suga

Papers

The returns to postgraduate education in Japan

The impact of the rise and collapse of Japan's housing price bubble on households’ lifetime utility