Russia has undergone tumultuous changes during the transition process. This has been nowhere more evident than within the labour market. The transition has now progressed to such an extent that it is possible to examine whether the issues of a re‐capitalisation and restructuring of human capital have been addressed. This paper uses the Russian Longitudinal Monitoring Survey to assess rates of return to human capital investments for the years 1994‐1998. It utilises standard earnings functions to assess the returns to education as well as to specific levels of post‐compulsory education and training. This article places specific emphasis on firm level training and the role of the firm, for the purpose of this special issue. Results suggest, in the case of Russia, that significant and positive returns to education and training exist comparable in magnitude to those in other transition countries.