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Human capital prices and wage inequality in Russia 1985-2004


Novikov, Anton (2007). Human capital prices and wage inequality in Russia 1985-2004. Master's thesis / Doctoral dissertation.


Using data collected between 1992 and 2004 by the Russian Monitoring Longitudinal Survey, this paper examines the contribution of different factors to wage inequality changes in Russia. Addressing seperately male and female wage distributions the study initially focuses on the general tendencies in wage inequality over years. Additional information reconstructed for wages in 1985 and 1990 allowed this survey to find a period of wage inequality expansion (till 2000) reaching 17 and 19 percent gap between the 90th and 10th percentiles in comparison with 1985 levels for male and female wage distributions correspondingly. The following years show overall inequality compression, which decreases the gap to 7 and 9 percent by 2004 for male and female workers correspondingly. Further analysis based on returns to education, experience and unobserved skills reveals two major connections between changing wage inequality and the "prices" of skills: returns to unovbserved skills prove to be the dominating force for inequality dispersion in women's wages; while men are found to be substantially affected by changing returns to experience.

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Novikov, Anton