Economic returns to higher education in Kazakhstan: assessing wage differentiation by education level based on the Mincer model

Abstract

Objective – to provide a quantitative assessment of the economic returns to higher education in the Republic of Kazakhstan based on an analysis of wage differentiation by education level for 2018-2025, applying the Mincer equation adapted to aggregated official statistics. Methods – aggregate adaptation of the Mincer equation to panel data (, calculation of wage differentiation coefficients, the education premium, and the gender wage gap coefficient, descriptive statistics. Results – the empirical base comprises data from the annual Bureau of National Statistics (BNS RK) survey under Form 2-T "Report on the Structure and Distribution of Wages" for 2018-2025 (8 observations, April of each year). A panel regression with year fixed effects (N=24) yielded an education premium coefficient of ρ = 0.161 (standard error 0.009; p < 0.001; 95% confidence interval 0.142-0.181), corresponding to a 17.5% increase in earnings per additional year of schooling. A model with an education × year interaction showed a statistically significant decline in this return over the period (interaction coefficient -0.012; p = 0.001). The premium for higher education relative to secondary, which fell from 110.4% in 2018 to 67.0% in 2024, rose to 71.8% in 2025. Gender analysis revealed a persistent wage gap across all education groups: the gender gap coefficient in 2025 ranged from 1.345 for higher education to 1.503 for postgraduate education. Conclusions – the authors note the statistically confirmed significance of the economic returns to education in Kazakhstan alongside its compression over 2018-2024 and reversal in 2025, pointing to the sensitivity of the premium to income policy; confirm the applicability of human capital theory to a transition economy, and point to the need for further monitoring of the identified trend.