Education and Employment in ‘Hard’ Science Provide no Salary Advantages Compared to ‘Soft’ Science at Any Career Stage
HSE University economists question whether Russian STEM specialists are better paid than non-STEM specialists. They compare wages of professionals with STEM and no STEM majors, and those working in STEM and no STEM jobs and explore how the gap evolves over the life cycle. They find that there is no advantage of STEM major and STEM job over their no STEM alternative. They present their findings in a paper published in the Voprosy Ekonomiki journal.
There is a consensual view that STEM (Science, Technology, Engineering and Math) related education and occupations play a key role for productivity growth and ultimately in providing the wealth of nations. Though all developed countries expand STEM education, they often keep complaining that these specialists are still in short supply. As a reflection of this situation, there is a loudly voiced criticism that the composition of university graduates does not fit the actual demand, and in suggestions to increase the number of students in STEM majors and decrease in social sciences and humanities. The perceived shortage should positively affect wages for STEM workers compared to specialists with the same level of education but alternative majors. This story is well known in many countries. Is Russia among them?
STEM education differs from that in humanities and social sciences, as it is usually more specialized and provides more practical skills than that in ‘soft sciences’. On the one hand, this helps graduates to start working earlier, but on the other hand, their skills face much higher risk of becoming obsolete since the technological frontier is moving very fast. A recent study in the US has found that STEM professionals start their careers with higher wages but the difference evaporates as they get older. Professionals without STEM diplomas have lower wages in the beginning but they benefit from a longer period of wage growth as they are less affected by the technological race. In the end, STEM wage advantage appears to be questionable.
The scholars from HSE University explore the issue exploiting all available data sources. These are aggregate data from the official statistics, micro-data from a few large-scale Rosstat administered household and enterprise surveys, and the HSE Russian Longitudinal Monitoring Survey. One of limitations of all these data sources is that they do not have information on data on individual abilities, and this does not allow to account for selection in STEM occupations.
On the supply side, they document very large annual outflow of graduates with STEM degrees from the educational system. Over the last two decades, on average about 300,000 people with STEM degrees, or between 28% and 40% of the total number of university graduates, annually enter the labour market.
On the demand side, the fraction of STEM professionals among all professionals remains at about one quarter. It decreases over age, making about 40% in 25-29 years old, about 30% among those of 40–44 and about 20% at the age of 60. Some professionals move to managerial positions, while others leave STEM for other fields.
The study suggests that even after accounting for all explanations (such as the fact that not all graduates work in the field), STEM supply is likely to exceed STEM demand.
The authors in their analysis exploit different data sets and different econometric specifications for checking the robustness of the results. The main finding that a STEM degree and/or a STEM job do not offer any wage advantages compared to non-STEM options remains robust. Furthermore, as individuals get older, they are likely to earn even less than non-STEM majors, all other things being equal. Generally, in STEM jobs, newly acquired skills are valued higher than long time experience: skills get older and obsolete too fast. Those who are willing to stay in the profession for a long time have to retrain continuously and run faster than recent graduates.
The data suggest that tech and science jobs in Russia remain male-dominated: women make up only one fourth of those with a STEM degree and in professional STEM jobs. Women in STEM earn also less than men—particularly at older ages—and their earnings decrease relatively faster. One of the tentative explanations can refer to the fact that public sector institutions are female dominated and pay more in line with experience.
The study rejects the assumption that there is a shortage of STEM professionals and shows that appeals to increase the number of students in STEM fields do not get the empirical support.
If there is a shortage in the market, this is a shortage of STEM skills, not a shortage of STEM graduates.
‘A further increase in the number of STEM is not going to solve the problem. Rather, it is likely to create a new one since the demand for them is limited. Of course, while this is true for STEM professions in general, it may not apply to specific fields and areas. The process of ‘creative destruction’ runs fast in this field, and the educational system must learn how adapt to the changing demand for STEM professionals and their continuing education.'
Europe to Face a Reverse Brain Drain: Up to 3.5 Million Highly Skilled Professionals Could Return Home
As the pandemic continues and working from home becomes the norm in some industries, professionals who once left to work in other countries are beginning to return home. Researchers from HSE University, the Catholic University of Louvain and the University of Lille have found out how strong this movement could be and what economic, social and political implications it might bring. The preprint of the study was published in the GLO Discussion Papers.
On average, women in Russia earn 30-35% less than men. According to this indicator, Russia is ahead of many developed countries. The difference in earnings is primarily associated with the uneven distribution of men and women in different industries and professions, but economists cannot explain a significant portion of the discrepancy. Aleksey Oshchepkov, Assistant Professor of the Faculty of Economic Sciences at HSE University, came to these conclusions after analyzing research materials and survey data. The results are published in a chapter of the volume, Gendering Post-Soviet Space, recently published by Springer.
According to Natalia Tikhonova, a social scientist with HSE University, gender asymmetry has been on the rise in Russia's labour market over the past 20 years. Gender asymmetry is reflected in the ‘feminisation’ of white-collar jobs and a disproportionate number of men among blue-collar workers. In addition to this, increasing automation in traditionally male industrial sectors is leading to fewer jobs available to men. In contrast, occupations with a growing demand for skills tend to be those which are mainly filled by women.
This September, HSE – St. Petersburg hosted the 3rd IZA/HSE University Workshop on Skills and Preferences and Labor Market Outcomes in Post-Transition and Emerging Economies. HSE News Service spoke with Professor Lehmann, co-organizer of the workshop, about human capital, the importance of cognitive and noncognitive skills, and the challenges empirical labour economists encounter when studying these issues in post-transition and emerging economies.
Temporary or informally employed people are less satisfied with their lives than those with a permanent job. The most apparent differences can be seen in countries with strict labour laws. Tatiana Karabchuk and Natalia Soboleva investigated the legislative impact on the social well-being of employed populations in European countries and Russia.
A flexible schedule is one of the main advantages of freelance work. But don’t rejoice in your freedom just yet: self-employment often disrupts the balance between life and work and takes up more time than traditional office work. HSE University researchers Denis Strebkov and Andrey Shevchuk investigated the downsides of independent work.
More than 64% of employed Russians work evenings, nights or weekends, and this is one of the highest figures among European countries. Andrei Shevchuk and Anna Krasilnikova were the first to study the extent of nonstandard working hours in Russia and its impact on work-life balance.
The way one thinks, feels and acts in certain circumstances can determine career opportunities in terms of employment and pay. For the first time in Russia, Ksenia Rozhkova has examined the effect of personality characteristics on employment.
In Russia, women earn about 70% of what men earn in wages. In the academic sector, this gap is smaller. However, although women make up a majority at universities, wage gaps between the two genders still persist. To find out why this is the case, IQ.HSE spoke with Victor Rudakov, Research Fellow at the Institute of Institutional Studies.
Students of engineering and economics, undergraduates of state universities, high performers, young people from wealthier families, and those working part-time while at university tend to expect higher salaries upon graduation.