Vlasovs, Aleksjes (2008). Geographic wage inequality in Russia: the role of workforce heterogeneity and different returns to workers’ characteristics. Master's thesis / Doctoral dissertation.
This work explores spatial wage inequality in the Russian Federation and decomposes the interregional wage differences into the effects of workforce compostirion and returns to workers' characteristics in order to find the main determinants of geographic earnings inequality at individual level. Applying the Caxaca-Blinder decomposition to the Russian Longitudinal Monitoring Survey (RLMS) data from 1994-2004 (rounds 5, 9, and 13), I find that although workforce characteristics vary noticebly across the eight macro-regions of Russia, almost all the difference in real wages is due to different pricing of those characteristics and even more importantly due to the region specific fixed effects. Price-quantitiy correlation analysis reveals that returns to colelge education, work experience, and professional jobs are consistently larger in the regions where these attributes are scarcer, while returns to other characteristics exhibit time-varying patterns. Policy makers who aim to reduce the regional distortions in real earnings should consider takinga a systematic approach.