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Decreasing earnings inequality in Russia: Trends and drivers from 2005 to 2023

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  • Lukyanova, A.

    (HSE University, Moscow, Russia)

Abstract

The paper examines the decline in earnings inequality in Russia since the early 2000s. The Gini index for earnings fell by nearly 40%, from 0.48 to 0.30. Using the data from two household surveys, we document the trends in inequality between 2005 and 2023 and identify potential drivers behind the trends. Econometric analysis employs RIF-based decompositions. My findings indicate that wage structure effects were the primary contributors to earnings compression, while composition effects - except in the 2020s - tended to exacerbate inequality. The paper highlights the most relevant explanations of changes in earnings inequality, including rising minimum wages, educational upgrading accompanied by declining returns to education, demographic shifts, regional convergence, narrowing rural - urban gaps, changes in industrial structure and industry premiums. Importantly, there was a notable distinction between the period following 2018-2019 and earlier years both in terms of the slowdown in inequality reduction and the mechanisms driving this reduction.

Suggested Citation

  • Lukyanova, A., 2024. "Decreasing earnings inequality in Russia: Trends and drivers from 2005 to 2023," Journal of the New Economic Association, New Economic Association, vol. 65(4), pages 267-275.
    • Handle: RePEc:nea:journl:y:2024:i:65:p:267-275
    DOI: 10.31737/22212264_2024_4_267-275
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    References listed on IDEAS

    as
    1. Julian Messina & Joana Silva, 2021. "Twenty Years of Wage Inequality in Latin America," The World Bank Economic Review, World Bank, vol. 35(1), pages 117-147.
    2. Fortin, Nicole & Lemieux, Thomas & Firpo, Sergio, 2011. "Decomposition Methods in Economics," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 1, pages 1-102, Elsevier.
    3. Barsky R. & Bound J. & Charles K.K. & Lupton J.P., 2002. "Accounting for the Black-White Wealth Gap: A Nonparametric Approach," Journal of the American Statistical Association, American Statistical Association, vol. 97, pages 663-673, September.
    4. R. I. Kapeliushnikov, 2021. "Returns to education in Russia: Nowhere below?," Voprosy Ekonomiki, NP Voprosy Ekonomiki, issue 8.
    5. Anna Lukiyanova, 2015. "Earnings inequality and informal employment in Russia," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 23(2), pages 469-516, April.
    6. Chernina, Eugenia & Gimpelson, Vladimir, 2023. "Do wages grow with experience? Deciphering the Russian puzzle," Journal of Comparative Economics, Elsevier, vol. 51(2), pages 545-563.
    7. Fernando Rios-Avila, 2020. "Recentered influence functions (RIFs) in Stata: RIF regression and RIF decomposition," Stata Journal, StataCorp LLC, vol. 20(1), pages 51-94, March.
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    More about this item

    Keywords

    earnings inequality; RIF-regressions; decomposition; RLMS; Russia;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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