Human capital in Russia: problems and perspectives

Interest in researching human capital as a relatively new phenomenon first occurred as early as in the 1960s. Gary Becker, Theodore Schultz, Irving Fisher dedicated their works to this topic. They first fashioned the concept of ‘human capital’ as a comprehensive theory. To provide a short definition, human capital is the stock of knowledge and competences necessary to satisfy human needs. The basis for human capital is formed, naturally, by education, or, more precisely, by the quality of the education received by a given person.

According to the Global Wealth Report, in Russia, the wealthiest 1% of the population dispose of 71% of all the personal assets.

This international research has established that Russia has the highest levels of inequality among the G20 countries as well as the BRICS countries, except for South Africa. According to the Global Wealth Report, in Russia, the wealthiest 1% of the population dispose of 71% of all the personal assets. As the cited statistical data show, material fractionalization is rather large, which also leads to a significant social fractionalization in terms of received education quality. Before considering the connection between income inequality and educational services, let us represent it schematically.

The problem of equal access to education has long interested researchers, as it is education that ensures young people’s social mobility. “The attractivity of education for young people, their aspirations in this field, the actual accessibility of education for people with different social backgrounds, predetermines, in essence, the future population’s education levels, the numbers and quality of qualified professionals in the future, which plays a key role in terms of modern tendencies of global development.” [1] It is the education quality that can either attenuate or exacerbate the inequality issue. Inequality starts with families’ inability to ensure a high-quality for their children and is overcome or, conversely, aggravated with the adult person’s ability to invest in the human capital development.

If we look at the issue of access to education, we have first to separate the population in two large groups, which concerns in particular secondary-level education: well-off families living in central cities and lower-income families living in smaller towns and rural areas. Around a quarter of Russian schools are situated in small towns and rural areas, and they employ less qualified educators; parents generally possess no higher education; schools lack modern technical equipment necessary in the educational process. [2] The 20% of the best schools, on the other hand, are situated in central cities of the respective regions; the parents of their students have higher education in the 80% of cases and these schools employ reputable staff. [3] Even more drastic inequality is perceivable in the access to higher professional education which is the final stage forming human capital. During the last ten years, higher education in the BRIC countries has become massive. The number of the Russian universities graduates grew by half between 2006 and 2013. In the other countries this indicator is significantly higher, which is due to the fact that the Russian Federation’s higher education system had been formed much earlier than in the rest of the BRIC countries.

In terms of population coverage with different-level education, Russia occupies one of the leading places in the world. However, only 18% of the Russian respondents claimed to possess a high-quality education.

Education reception is primarily affected by the parents’ achieved education levels. Every social group continues to reproduce itself. For instance, 61% of lower-income parents have either primary or incomplete secondary education. Their children’s education levels are higher: 39% have basic professional and 53% secondary professional education. [4]

In terms of population coverage with different-level education, Russia occupies one of the leading places in the world, as the ratio of Russians with at least specialized secondary education amounts to around 55%, which surpasses the same indicator for OECD countries twofold. However, only 18% of the Russian respondents claimed to possess a high-quality education. [5] Mainly they are graduates of elite universities in capital cities the admission to which requires serious training with highly qualified teachers, but sadly this option is only available for a few families in Russia. According to the Kommersant newspaper, Russian 2014 graduates from elite universities (such as the Moscow State University, the Moscow State Institute for International Relations, the Higher School of Economics) can count on a wage of 40 to 50 thousand rubles. [6] Martin Carnoy (researcher and author of the Mass Higher Education: A BRIC Triumph?) has remarked that in all te BRIC countries, universities divide into elite ones and the rest. The proportion of elite education makes up 12 to 16% and practically does not grow, turning into a fixed value, whereas low-quality programs become ever more numerous. [7] In sum, the system continually reproduces social and economic inequality. Mass higher education in the BRIC countries does not reduce inequality in the human capital accumulation process but in fact perpetuates it. In Russia, the demand for higher education will decrease due to an unfavorable demographic situation. In India and China, on the other hand, the demand will further grow. The higher education policies of the BRIC countries will focus on mass higher education because it is a sustainable process propped by the knowledge economy and the demand on the global labor market.

In 2015, the percentage of expenses on education in the whole federal budget expenses will decrease by 0.6% compared to the current year, and a tendency to decrease education expenses is foreseeable until at least 2017.

As to the improvement of mass higher education quality in Russia, we observe a reduction of education expenses. For instance, in 2015, the percentage of expenses on education in the whole federal budget expenses will decrease by 0.6% compared to the current year, and a tendency to decrease education expenses is foreseeable until at least 2017, which is depicted on the diagram below. [8]

График доли расходов федерального бюджета на образование к общим расходам федерального бюджета на период 2014-2017 гг.

Diagram of the proportion of federal education budget to the general federal budget expenses between 2014 and 2017.

/Y axis:/ in % from the general federal budget expenses

/X axis:/ Period of time

The rector of the Higher School of Economics Yaroslav Kuzminov has suggested to introduce fees for higher education in Russia, or at least for some of its sectors, in order to improve its quality and motivate the students to be more responsible in their studies. To determine the fee rate, additional research is necessary, the rector emphasized. But it is unclear whether introducing fees will help improve the quality of education; rather, this measure will probably polarize the society even further in terms of access to education. The mass higher education trend in the BRICS countries will gather momentum, and it will sustain inequality in access to education. The inequality can be reduced by improving the quality of mass higher education.

An interesting tendency related to human capital has been noted by Y.V. Ovchinnikova: during the last 5 years, in spite of the overall educational level rise in the population, the intensity of knowledge and competence renewal has decreased. To get higher education in Russia means no real investment in human capital, but rather just fulfilling an established cultural norm.

Article by Victor Sokolov, M.A. for public policy, research associate at the Russian Presidential Academy of National Economy and Public Administration

References

  1. Константиновский Д.Л. Неравенство в сфере образования: российская ситуация  // Государство и общество, №5, 2010. – C. 41.
  2. Константиновский Д.Л., Вознесенская Е.Д., Чередниченко Г.А., Хохлушкина Ф.А. Образовательные и жизненные траектории молодёжи: 1998-2008 гг. – М.: ФГНУ ЦСИ, 2011. — С. 123.
  3. Константиновский Д.Л. Неравенство в сфере образования: российская ситуация  // Государство и общество, №5, 2010. – C. 48.
  4. Скок Н.И., Родионова С.Д. Природа социального неравенства в образовании // Социальная политика, №9, 2012. – С. 87
  5. Ключарев Г.А. Человеческий капитал  и проблема неравенств в модернизирующемся образовании // Вестник Института Социологии, №3, 2011. – С. 94.
  6. http://www.kommersant.ru/doc/2558746
  7. http://www.hse.ru/news/science/133683785.html
  8. Основные направления бюджетной политики на 2015 год и на плановый период 2016 и 2017 годов. – С. 73.

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