The Influence of Family Income on the Choice of Work Path of Young People

This study investigates the impact of family income on the career trajectory of young people in Russia. Using data from the Russian Longitudinal Monitoring Survey (RLMS) collected between 2017 and 2022, we analyze how family income affects the likelihood of university enrollment and subsequent wage outcomes. To estimate the probability of attending higher education institutions, we employ a logit model that includes variables such as family income, household size, parental education, age and gender. Our results demonstrate a significant positive correlation between family income and the probability of university enrollment, indicating that children from wealthier families are more likely to pursue higher education. To assess the financial returns of higher education, we apply both Ordinary Least Squares (OLS) and Instrumental Variable (IV) approaches. These methods reveal that obtaining a higher education degree can lead to a wage premium ranging from 23% to 40%, highlighting the economic benefits of higher education. The analysis also exposes notable differences in wage outcomes based on family background. The findings underscore the significant role of socioeconomic background in shaping educational and career decisions, as well as the long-term economic outcomes of individuals.