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Inequality in the labor market

Priority areas of development: economics

Goal of research:  Determination of inequality in the labor market in the micro-level (individuals, enterprises, regions). The realization of the goal of research was carried out through the following directions: human capital, labor income, employment structure, employment conditions

Object of study: enterprises, regions and individuals in the labor market


Analysis was carried out through using of different econometric methods and models, including Ordinary least squares (OLS-regression), logistic regression, probit regression, Two-stage least squares regression, Oaxaca-Blinder and Brown decomposition, fixed and random effects models.

Empirical base of research:

  • Data of Federal State Statistics Service (2002-2017) by Russian regions
  • Russian Longitudinal Monitoring Survey of Higher School of Economics (2000-2017)
  • Data of Federal State Statistics Service Labor Force survey (1995-2015)
  • Enterprise survey «Interaction of internal and external labor markers» (2014) that represents Russian enterprises.
  • Russian enterprises' Senior executives database (5000 Senior Executives, 2000-2017)

Results of research:

The results of research characterize different aspects of inequality in the Russian labor market. We found that that internal and external migration of the population reduces the speed of convergence of the Russian regions in terms of wages. At the same time, the convergence of Russian regions does not depend on the quality of the human capital of migrants.

Workers of foreign origin who are employed in the Russian labor market since the 1990s and from the 2000s differ in their socio-demographic characteristics and level of labor income from local workers. At the same time, their long stay in the Russian labor market leads to decrease of the inequality of their labor income and the labor income of the local population.

During the period of 1995-2015, there was a significant ageing of the Russian workforce. In 2015, 10% of workers were over working age. At the same time, the level of pensions in Russia is 30-35% to the level of the average wage, which put considerable limitations for leaving the labor market for elderly workers. The population leaves the labor market only in case of serious health problems. At the same time, there is a limited demand for older workers which reflects the segmentation of their jobs by professions and sectors of the national economy.

Over the past 15 years, the proportion of young people aged 25-29 has increased in Russia. At the same time, young people in Russia are characterized by low variability for various health diseases. Neither disability, nor chronic diseases have a significant impact on the choice of the sphere of youth employment. At the same time, health has a significant impact on the choice of the university, the labor income of individuals and the distribution of hours of work between employment in the labor market and household activities. Poor health leads to the higher probability of choice of the universities with a low rating, a reduction in wages and a reduction in hours of work in the labor market.

The investment of enterprises in the education of workers can help to reduce the inequality in the labor market. However, the results of our study shoes that in spite of the fact, that the majority of Russian enterprises state the existence of vocational training programs, the share of trained employees remains relatively low. In Russia, as in many other developed and developing countries, the probability of training decreases with age. A particularly significant reduction in participation in training is observed for the age group of workers over 50 years. The main reason for the low level of employee participation in vocational training is the low technical advancement of Russian enterprises and lack of competition in the output markets.  

The results of analysis of gender inequality in terms of salaries in Russian universities have confirmed the existence of gender wage gap in faculty salaries the Russian academic sector: on average, male faculty members earn 16-18% more than their female colleagues. The problem of ‘glass ceiling’ does exist at Russian HEIs: it is more difficult for women to raise higher in the academic hierarchy, though this might partially be due to self-selection.

The study of the application of various personnel policies by the organizations in relation to personnel and their impact on the performance of organizations makes it possible to draw a number of conclusions. Vocational training positively affects the labor productivity of enterprises. However, the financial status of enterprises that train workers in the workplace is worse compared to those that do not train employees.

Enterprises that use contingent labor have better financial status and higher level of labor productivity.  However, an increase in the share of contingent employees in enterprises raises the level of labor productivity only to a certain critical level, after reaching it, a further increase in the share of contingent employees lead to a decrease in labor productivity.

Enterprises that use fixed-term contracts have a lower level of labor productivity. The increase in the share of workers with fixed-term employment contracts positively affects the growth of labor productivity only to a certain level. If the share of workers with fixed-term employment contracts exceeds this level, then the growth of labor productivity in enterprises slows down.

We also found that for the banking sector enterprises in case of deterioration of financial performance and during periods of crisis, the turnover among the members of the board of banks increases. Thus, the personnel policy with respect to the change of leading bank executives operates according to market principles, facilitating the selection of more competent and efficient managers.

Level of implementation, recommendations on implementation or outcomes of the implementation of the results

The results of the project were published in different academic journals and preprint series (6 articles, 2 preprints), were discussed at seminars and conferences in Russia and foreign countries. The results of the project are also used in educational process in the preparation of teaching aids, manuals and lectures on labor and personnel economics.

The results of the survey, obtained from enterprise data, can be demanded by the Ministry of Industry and Trade of the Russian Federation and the Ministry of Economic Development of the Russian Federation for the development of measures to create incentives for ensuring labor productivity growth and financial efficiency of enterprises and organizations. There can be developed different measures for improvement of competitiveness of Russian economy and development of industrial sectors through investment in human capital and efficient use of human resources, including labor of immigrants, young and older workers.

The results of the project have policy implications and can be applied for advancement of economic and social policies. They are relevant for the Ministry of Labor and Social Protection of the Russian Federation to reduce the disparity in labor income, conditions and employment structure of different socio-demographic groups.

The results of the study can be used by the Ministry of Education of the Russian Federation to develop measures for the development of vocational education and training, as well as measures to ensure the training of the personnel in the conditions of technical advancement of workplaces.


Roshchin S., Travkin P. Determinants of on-the-job training in enterprises: the Russian case // European Journal of Training and Development. 2017. Vol. 41. No. 9. P. 758-775. doi
Solntsev S., Roshchin S., Vasiliev D., Васильев Д. С. Recruiting and Job Search Technologies in the Age of Internet // Форсайт. 2017. Vol. 11. No. 4. P. 33-43. doi
Solntsev S., Roshchin S., Vasiliev D., Васильев Д. С. Recruiting and Job Search Technologies in the Age of Internet // Форсайт. 2017. Vol. 11. No. 4. P. 33-43. doi
Смирных Л. И. Какие предприятия используют временных работников?, in: Неустойчивость занятости: международный и российский контексты будущего сферы труда. Москва : РеалПринт, 2017. С. 97-109. 
Смирных Л. И., Woergoetter A. THE IMPORTANCE OF INSTITUTIONAL AND ORGANIZATIONAL CHARACTERISTICS FOR THE USE OF FIXED-TERM CONTRACTS IN RUSSIA // Journal of East European Management Studies. 2019. № 1. C. 89-121. doi
Roshchin S., Travkin P. Determinants of Job-Related Training in Enterprises: The Russian Case / Высшая школа экономики. Series WP BRP "Economics/EC". 2017. 
Polyakova E., Kuleva M. Cultural employment in Russia and Europe: a comparative analysis / Centre for German and European Studies Bielefeld / St. Petersburg. Series WP 2014-04 "CGES Working Papers". 2018.