nep-cis New Economics Papers
on Confederation of Independent States
Issue of 2006‒04‒29
two papers chosen by
Anna Y. Borodina
Perm State University

  1. Wage Inequality in Russia (1994–2003) By Lukyanova Anna
  2. Firm-paid vs. worker-paid on-the-job training in Russia: Determinants and returns By Lazareva Olga

  1. By: Lukyanova Anna
    Abstract: The paper documents the changes in the size of the wage distribution in Russia over the period 1994–2003. Developments in wage inequality varied a lot by sub-periods: overall wage inequality stayed stable in 1994–1996, then it jumped following the 1998 crisis and remained at higher levels for three years. In 2002 the trend reversed again and in the course of a single year wage inequality fell back to the level of the mid-1990s. We find that evolution wage inequality was largely driven by changes in the upper end of the wage distribution. Decomposition of wage inequality by population sub-groups shows that inequality has been higher for men, younger and low-educated workers, and rural inhabitants. The structure of inequality did not change much over the period from 1994 to 2003. Demographic variables (mainly gender and region) explain the largest proportion of wage dispersion (over 40% of the explained variation and 15% of total variation). Nearly equivalent is the contribution of firm characteristics with industry affiliation of employer playing the leading role. Our results show that returns to education continued to rise at all percentiles of the wage distribution converging at the level of about 8–9% of wage increase for an additional year of schooling.
    Keywords: Russia, wage inequality, decomposition, quantile regression
    JEL: E24 J31
    Date: 2006–04–26
  2. By: Lazareva Olga
    Abstract: In a restructuring economy on-the-job training plays important role not only in raising the general level of human capital but in retooling workers for the new sectors of economy. The amount of on-the-job training in Russia has however been unsatisfactorily low compared to other countries. Main objective of this paper is to study the incentives of firms and workers to invest into employee training in Russia. Utilizing the data from Russian Longitudinal Monitoring survey for years 1999–2003, we investigate the determinants of training financing with the particular emphasis on the role of labor market characteristics. We exploit heterogeneity in the structure of regional labor markets in Russia to investigate its effect on training outcomes. In line with existing theory, it is shown that imperfections of the labor market, such as higher regional labor market concentration, lower share of small businesses and higher unemployment create incentives for the firms to provide training to employees. Hence, increase in the efficiency of the labor market is likely to bring about further decrease in the amount of employee training in a private sector.
    Keywords: Russia, on-the-job training, labor market structure, returns to training.
    JEL: J24 J31
    Date: 2006–04–26

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