The goal of this research is to trace the evolution of human capital in Russia over the period of economic transition. The study gives a picture of developments in the occupational structure with special focus on demand for skills.
The data of the Russian Longitudinal Monitoring Survey for 1994-2008 are used in Section 1 to analyze educational attainments and professional training of Russian workers, economic returns to higher and vocational education and demand for innovative forms of human capital in Russia. Section 2 uses a method of meta-analysis to study the dynamics of returns to schooling. Section 3 reports the findings on inter-regional differentiation in education premiums and explores its determinants. Using the data on occupational earnings for 2007, Section 6 investigates different aspects of wage inequality within and between occupational groups. Next section focuses on various aspects of demand for professional training. It analyzes what Russian industrial firms do to meet the demand for skills by training existing employees and hiring new staff. We demonstrate that Russian firms do not carry out sufficient in-house training and mostly rely on acquiring the required human capital from the external labor market. The reasons for under-provision of in-house training include high wage inequality and excessive labor turnover which de-stimulates investments in human capital.
Our analysis of demand for skills and economic returns to occupations has important theoretical and policy implications. From theoretical perspective, it is important to understand in-depth processes in the labor market and their socio-economic consequences. From practical point of view, this analysis is essential for the education policy as it provides some guidance on priorities of professional training.