published in: Journal of Comparative Economics, 2023, 51 (2), 545-563
The study explores how wages grow with experience in the Russian Federation. In all available cross-sectional data, the trajectory of the observed wage–experience profile is flat, peaks early, and declines sharply afterwards. This shape looks puzzling since it differs starkly from that observed in both developed and developing countries. We show that a proper interpretation of the wage–experience profile is hindered by the APC problem, when the effects of time, cohort, and experience are mixed. Our study uses data from the RLMS-HSE household survey covering the years 2000-2019. Relying on human capital theory, we apply a procedure suggested by Heckman et al. (1998) and advanced in Lagakos et al. (2018) to disentangle the APC effects.
With certain assumptions concerning human capital depreciation due to aging, our results show that Russian wages do grow monotonically with experience. However, this growth is partially offset by the cohort effect that that proceeds in the opposite direction, thus reflecting massive depreciation of the human capital of workers from older cohorts. Meanwhile, the time effect mirrors the general GDP path as well as all booms and busts over the period.
We use cookies to provide you with an optimal website experience. This includes cookies that are necessary for the operation of the site as well as cookies that are only used for anonymous statistical purposes, for comfort settings or to display personalized content. You can decide for yourself which categories you want to allow. Please note that based on your settings, you may not be able to use all of the site's functions.
Cookie settings
These necessary cookies are required to activate the core functionality of the website. An opt-out from these technologies is not available.
In order to further improve our offer and our website, we collect anonymous data for statistics and analyses. With the help of these cookies we can, for example, determine the number of visitors and the effect of certain pages on our website and optimize our content.