The dynamics of youth wages in the Russian labor market

Abstract

The article considers socio-economic status of young people in the Russian labor market on the basis of analysis of the pooled cross-sectional data on real wages of young workers from 2000 to 2013, which is compared with wages of adult workers (of 30 years of age and older). This research is the first one to present analysis of economic status of youth on the basis of microdata array of the Russia Longitudinal Monitoring Survey (RLMS-HSE) comparable with the data from the Rosstat. The author reviews the gap between youth wages and those of adult workers, including by the level of education, employment sector, professional qualification and gender. Mincer wage equation is estimated separately for adult and young workers, by applying the method of least squares using Heckman’s procedure. The performed analysis showed that for the period under review the relative economic status of the youth has improved significantly: adult-young wage gap decreased by 13 percent, earnings of youth and adult workers equaled, youth wages grew faster than wages of workers of older cohorts. Nevertheless, there still is an adult-young wage gap for workers with higher education. Adult workers earn higher wages at the workplaces that require tenure (education, public sector), as well as at the high skilled jobs that require both tenure and higher education. On the contrary, at low-skilled jobs, where work experience is irrelevant, young workers earnings are higher.