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...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2015
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2015/08/24903668/decade-declining-earnings-inequality-russian-federation http://hdl.handle.net/10986/22435 |
| Summary: | 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. |
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