This paper focuses on the changing economic value of secondary and higher education in four potential world economic powerhouses-Brazil, Russia, India, and China-known as the BRIC countries. We show that in the past twenty-five years in the BRIC countries, changes in rates of return to higher education have not conformed to the diminishing returns to capital theory, which says that rates decline with level of education and that this pattern holds as countries develop economically and educationally. The rates to university completion have generally risen relative to the rates to investment in lower levels of education, and in all but India are now higher than the payoff to secondary schooling. We argue that this reflects the rapid economic change in all four countries, including their incorporation into the global economy, and, in Russia and China, the transformation from command to increasingly market economies JEL Classification: J24, J31.

We estimate the influence of classmates' ability characteristics on student achievement in exogenously formed university student groups. The study uses administrative data on undergraduate students at a large selective university in Russia. The presence of high-ability classmates has a significant positive effect on individual grades in key economics and mathematics courses as well as on overall academic performance. While a simple linear-in-means model reveals moderate peer effects, non-linear specifications give strong evidence that students at the top of the ability distribution derive the greatest benefit from high-ability classmates. Less able students are not affected by peers and have no significant influence on peers' outcomes.

For decades, universities in Soviet countries were governed, evaluated, and financed according to the same principles. The current system is not like this former one. However, faculty contracts-a core element in any university-still participate much in common. While this article is based on detailed data on the academic profession in Armenia, Kazakhstan, Latvia, and Russia, the described trends are, to some extent, common for all post-Soviet countries. WHAT FACULTY ARE SUPPOSED TO PROVIDEFaculty contracts in post-Soviet countries reflect the fact that many universities form primarily educational entities, built around teaching and learning processes. So, faculty contracts more or less explicitly describe teaching loads and obligations, and most monitoring and reporting activities are concentrated around contractual arrangements. At the same time, the professoriate in general has little incentives and opportunities to be actively involved in research:

We estimate the influence of classmates' ability characteristics on student achievement in exogenously formed student groups. The study uses administrative data on undergraduate students at a large selective university in Russia. The presence of high-ability classmates has a positive effect on individual academic performance, and students at the top of the ability distribution derive the greatest benefit from their presence. An increase in the proportion of less able students has an insignificant or negative influence on individual grades.

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