Scenario-Based Projections of Educational Capital in Russian Regions: A Comparison of Consolidated and Differentiated Investment Policies

Abstract

In recent years, regional policy has prioritized developing human capital amid population decline and rising geoeconomic fragmentation. This paper projects the development of human capital in Russian regions up to 2035 under two scenarios: a consolidated policy scenario (CPS) promoting regional convergence and a differentiated policy scenario (DPS) maintaining existing heterogeneity. Using dynamic panel regression with Arellano–Bond estimators and Rosstat data for 84 regions, the study examines the impact of these scenarios on education and labour markets. Under the CPS, education spending relative to regional GRP is expected to decline, and higher education expansion slows, leading to a reallocation of human capital investments. The share of workers with tertiary education stabilizes at around 30 %, with each additional year of education contributing roughly 11 % to regional GRP. Under the DPS, education and research spending generally rise, the share of workers with higher education increases to 33–35 %, and interregional educational disparities narrow. However, the marginal contribution of each additional year of education to GRP falls to about 7 %, assuming similar economic growth. These findings illustrate the trade-offs between centralized coordination and differentiated development in human capital investment, offering guidance for regional policy. The projections are conditional and should be interpreted with caution due to assumptions of linear growth, stable demographics, and limited spatial interactions.