Age Differentiation in Wages in the Russian Labor Market: Identification of the Causes

Abstract

The article examines the reasons for the significant age differentiation in wages that has developed in the Russian labor market. Based on the literature review, two hypotheses of the study were formed, reflecting the factors of wage changes with respect to age. The first hypothesis is that the wages of older workers are determined by age discrimination. According to the second hypothesis, the wages of older workers depend on their accumulated human capital (education, skills, and health). To test the two hypotheses of the study we carry out a multidimensional statistical analysis. It included the construction of regression models, performing discriminant analysis, and testing statistical hypotheses of data uniformity. We use the data from the Russia Longitudinal Monitoring Survey of HSE (RLMS-HSE) covering the years from 2000 to 2019. The data from the monitoring survey have been analyzed not only with respect to age, but gender as well. The results of the study confirmed the first hypothesis for men of pre-retirement and retirement age, as well as women of retirement age. The second hypothesis that the depreciation of human capital with age affects the remuneration of older workers has been partially confirmed. For the older generation of both sexes, a significant factor of wages is health, for men it is also the presence of a completed professional education. Continual education has a positive effect on average earnings, but only for women. Computer skills increases all workers’ wages except men older than 60. We did not find out any significant effect of human capital accumulation on wages for workers of pre-retirement and retirement age

Keywords

• wages
• older workers
• discrimination
• ageism
• human capital
• differentiation
• russia