Differentiation of Salaries due to Inequality of Opportunities in Russian Regions
Keywords:
Inequality of opportunity, differentiation of labor income, regional inequality, factors-circumstances, ex-ante approach.Abstract
Differentiation of an individual’s achievements includes, firstly, «fair» inequality caused by factors within the area of personal responsibility (effort, perseverance, etc.); secondly, the «unfair» one, caused by factors that the individual cannot control or change (male, age, place of birth, quality of upbringing, etc.). It is precisely reducing the second type of inequality — inequality of opportunities — that government policy measures should be aimed at. This research seeks to estimate the wage differentiation caused by inequality of opportunities using microdata (according to the sample observation by Rosstat). The factors-circumstances influencing the individual’s achievements included gender, age, size of the locality where the individual lives, lack of higher education. The study has revealed that the level of inequality of opportunity in Russia is decreasing, but regional disparities by this indicator do not change significantly. At the same time, the heterogeneity of the subjects of the Russian Federation in terms of the level of inequality of opportunities is higher than that of general inequality of labor income. The difference between the minimum and maximum overall salary differentiation index in 2021 was 5.5 times, while for inequality of opportunity the difference was 7.2 times. Inequality of opportunities explains at least 20–24% of total wage differentials.
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