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Does Higher Education Contribute to a Change in Attitudes to Government Price Control in Russia?

Bruhanov M., Nye J., Polyachenko S. S.
Does the educational process itself transform an individual’s world outlook towards pro-market values in transition? Much evidence indicates that education correlates with liberal values. However, it is not clear whether this association is the result of selection into education or whether education itself makes people liberal as education and liberal values both are linked to unobservable characteristics such as cognitive abilities, household traits, and the social environment, implying biased ordinary least squares estimates. We employ unique data from 2 waves of the Russian Longitudinal Measurement Survey (RLMS) which contains individual attitudes towards government price control. To overcome the issue of the mutual correlation of liberal values, education, and predetermined and time stable characteristics (fixed effects), we use regressions in first-differences. A negative link between obtaining higher education and support for government price control is documented. The results are also robust to different indicators of the dependent variable and for different sub-samples. Additionally, based on a cross-section sample, we provide evidence that the psychodynamic channel of educational impact on pro-market attitudes is important: white-collar occupations can be considered as insurance against possible market price shocks. The liberal effect of education shows the importance of research on educational policy in the process of the formation of pro-market attitudes in Russia and in other transition economies.