A Decade of Declining Earnings Inequality in the Russian Federation

Wage inequality decreased significantly in the Russian Federation over the 2000s. The economic expansion experienced throughout the decade led to an improvement in social indicators, with a large reduction in poverty rates and an increase in higher education. In this context, wage inequality showed a sharp decline, with the Gini index on labor income decreasing by 18 percent between 2002 and 2012. Using data from the Russian Longitudinal Monitoring Survey, this paper documents the reduction in wage inequality and explores potential factors behind the trend. The analysis uses a decomposition technique proposed by Fortin, Lemieux, and Firpo (2011) to disentangle the main drivers behind changes in the wage distribution. The results suggest that wage structure effects are more important than composition effects for explaining changes in wage inequality. Institutional factors, such as minimum wage policies and changes in the returns to employment in different sectors and types of firms as well as the reduction of the skill premium, emerge as the most relevant factors for explaining changes in the wage structure.

Bibliographic Details

Main Authors:	Calvo, Paula Andrea, Lopez-Calva, Luis-Felipe, Posadas, Josefina
Format:	Working Paper biblioteca
Language:	English en_US
Published:	World Bank, Washington, DC 2015-08
Subjects:	JOBS, EMPLOYMENT, ECONOMIC GROWTH, PRODUCTIVITY EFFECTS, ACCOUNTING, WAGE GAP, PRODUCTION, WAGE COMPRESSION, SKILLED WORKERS, RETIREMENT, WAGE DIFFERENTIAL, MINIMUM WAGE, STRUCTURAL CHANGE, DISPOSABLE INCOME, INCOME, FOREIGN OWNERSHIP, SERVICE SECTOR, EXPECTATIONS, HIGH SCHOOL DROPOUTS, AGE GROUP, GDP PER CAPITA, INFORMATION, LABOR FORCE, ELASTICITY, MONITORING, PREVIOUS DISCUSSION, PUBLIC SERVICES, POLITICAL ECONOMY, ECONOMIC STRUCTURE, JOB, EFFECTS, AGE CATEGORIES, LABOR ECONOMICS, DISTRIBUTION, VARIABLES, PAYING JOBS, FIRM SIZE, OWNERSHIP, PRESENT STUDY, REAL WAGES, LABOR FORCE PARTICIPATION, JOB INSECURITY, UNPAID WORKERS, PAID WORKERS, TRENDS, DRIVERS, MALE WORKERS, HIGH SCHOOL DROPOUT, EARNINGS INEQUALITY, LABOR MARKET, INFLUENCE, PRIVATE FIRM, PER CAPITA INCOME, EDUCATIONAL ATTAINMENT, ECONOMIC MOBILITY, MONEY, WORKER, INEQUALITY MEASURES, INCOME INEQUALITY, BASE YEAR, PRODUCTIVITY, WAGE DISPERSION, TOTAL WAGES, CRITERIA, MARKETS, HOUSEHOLD INCOME, ORGANIZATIONS, WAGE POLICIES, INFLATION RATE, STANDARDS, LABOR, ELASTICITY OF SUBSTITUTION, TOTAL EMPLOYMENT, HIGH WAGES, GROSS DOMESTIC PRODUCT, AVERAGING, URBAN WORKERS, FINANCE, MINIMUM WAGES, FEMALE LABOR, MARKET ECONOMY, UNEMPLOYMENT, SKILL PREMIUM, COLLEGE EDUCATION, AVERAGE WAGES, WORKERS, YOUNG WORKERS, WAGES, POLICIES, TOTAL WAGE, FINANCIAL CRISIS, WAGE INEQUALITY, VALUE, AVERAGE WAGE, CLERKS, STATE-OWNED ENTERPRISES, DEMAND, WAGE PREMIUM, OCCUPATIONS, NOMINAL WAGES, OCCUPATION, INCOME DISTRIBUTION, PRIVATE FIRMS, AGRICULTURE, LABOR MARKET INSTITUTIONS, DISADVANTAGED GROUPS, RURAL WORKERS, PRIVATE SECTOR, MEASUREMENT, EARNING, RURAL EMPLOYMENT, ECONOMIC RECOVERY, ECONOMICS, WAGE POLICY, INFLATION RATES, WAGE STRUCTURE, GDP, GROWTH RATE, ECONOMIC EXPANSION, EXTREME POVERTY, FEMALE LABOR FORCE, CRISES, SUPPLY, EMPLOYEE, WAGE DIFFERENTIALS, COLLEGE GRADUATES, LAW, LABOR MARKET ADJUSTMENT, CONSUMER PRICE INDEX, UNSKILLED WORKERS, WAGE DISTRIBUTION, LABOUR, CONTRACTUAL WAGES, LABOR MARKETS, FINANCIAL SECTOR, OUTCOMES, PUBLIC SECTOR WORKERS, INTERNATIONAL MARKETS, PRIVATE SECTORS, PRICES, WAGE PREMIUMS, DEVELOPMENT POLICY, EMPLOYEES,
Online Access:	http://documents.worldbank.org/curated/en/2015/08/24903668/decade-declining-earnings-inequality-russian-federation http://hdl.handle.net/10986/22435
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