The study raises the problem of human capital heterogeneity at the Russian labor market caused by non-random distribution of unobservable skills across the population of a transition country. At the beginning of the transition, people who were grown up in different times or cultures have distinct moral norms, behavioral patterns, preferences and the knowledge. This results in the differences in unobservable abilities and earnings capacity of people. We argue that cohort, a pre-transition occupation, an urban place of birth, and nationality might serve as proxies for unobservable skills in the transition. The cohort effects were separated by two ways. According to the first one, the logarithm of the real wages index was used as a proxy for current period. The second one is based on an assumption on the form of age-earnings profiles in Russia. The estimation results reveal the significance of all the proxies for unobservable abilities and the robustness of estimates. At the same time, conditioning of the effects of cohort and pre-transition occupation on gender is discovered.
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Paper provided by EERC Research Network, Russia and CIS in its series EERC Working Paper Series with number
01-151e.
Length: Date of creation: 17 Feb 2005 Date of revision: Handle: RePEc:eer:wpalle:01-151e
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Find related papers by JEL classification: J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration P21 - Economic Systems - - Socialist Systems and Transition Economies - - - Planning, Coordination, and Reform P27 - Economic Systems - - Socialist Systems and Transition Economies - - - Performance and Prospects
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