How Unfair is the Inequality of Wage Earnings in Russia? Estimates from Panel Data

20 Pages Posted: 20 Apr 2016

See all articles by Sailesh Tiwari

Sailesh Tiwari

World Bank; Brown University - Department of Economics

Gabriel Lara Ibarra

The World Bank - Poverty and Equity Global Practice

Ambar Narayan

World Bank, Poverty Global Practice

Date Written: June 3, 2015

Abstract

This paper attempts to determine the extent to which inequality in wage earnings in the Russian Federation is unfair. Unlike other similar attempts that can, at best, produce a lower bound on the estimate of the share of inequality that is unfair, this paper exploits the longitudinal nature of the data to come up with a lower bound as well as an upper bound. The upper bound is further refined to take into account the indirect effect of circumstances at birth (gender, parental wealth, etc.) on effort. Results show that the upper bound on the inequality of opportunity may be three to four times the measured lower bound and significantly higher for females than males in the sample. Finally, comparison with the United States and Germany show that although total inequality is lower in Russia, the share of unfair inequality is distinctly larger. The markedly large explanatory role of extraneous factors, such as gender and parental characteristics, in wage inequality calls for a close examination of governments? efforts to address inequities in the labor market.

Keywords: Inequality

Suggested Citation

Tiwari, Sailesh and Lara Ibarra, Gabriel and Narayan, Ambar, How Unfair is the Inequality of Wage Earnings in Russia? Estimates from Panel Data (June 3, 2015). World Bank Policy Research Working Paper No. 7291. Available at SSRN: https://ssrn.com/abstract=2614187

Sailesh Tiwari (Contact Author)

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Brown University - Department of Economics ( email )

64 Waterman Street
Providence, RI 02912
United States

Gabriel Lara Ibarra

The World Bank - Poverty and Equity Global Practice ( email )

1818 H St NW
Washington, DC 20433
United States

Ambar Narayan

World Bank, Poverty Global Practice ( email )

1818 H Street, NW
Washington, DC 20433
United States

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