Modelling and Analysis of the Influence of Alcohol Consumption on Employment and Wages in the Russian Federation

The graduate thesis analyzes the effect the alcohol consumption has on employment and wages in Russia on the basis of data gained from RLMS-HSE analysis for the period of 2012-2014. The thesis consists of an introduction, three chapters, a conclusion, references and appendix. The first chapter is devoted to the studies of labor characteristics of the population and the levels of alcohol consumption in Russia. The second chapter analyzes the alcohol profiles of men and women and the population in general; it also describes key indicators of the respondents. The third chapter presents the modelling results based on panel data. The best models to assess the impact of alcohol consumption on wage and employment are the model of Hausman-Taylor and the logit-model of binary choice with fixed effects. All in all, alcohol consumption negatively influences wage and employment. According to these models wage simultaneously increases with age, length of service, number of years spent on education, as well as the number of population. The unemployment rate in the subject of the Russian Federation where the respondent lives, respectively exerts a negative effect on labor characteristics. At the same time it was discovered that women's labor income is lower than men’s one. Besides, the salary in 2013 increased and fell in 2014, which corresponds to the real data and proves that the RLMS-HSE is able to adequately explain the contemporary trends in Russia.