The Earnings Differential Between Long-Тerm Immigrants and Natives in Russia: Тhe Role of Cohorts

Abstract

In this paper the author analyzes the impact of immigration cohorts on the earnings differential between long-term immigrants and natives in Russia. The nationally representative data came from the Russian Longitudinal Monitoring Survey for 2010–2015. The main methods of empirical analysis in the study are ordinary least squares regression and the random effects model. The obtained results show that long-term immigrants who moved to Russia in the 2000s earn less on average than natives and those who moved to the country in the 1990s. The findings can be explained by two main reasons. On the one hand, cohorts differ in length of the residence period in the country. It is expected that immigrants who moved to Russia in the 1990s have been living in the country for a longer time and could have gained more competence and skills required for the Russian labor market. This, in turn, may positively affect their earnings. On the other hand, the two groups are quite heterogeneous in terms of human capital. Immigrants from the later cohort are less educated, and the share of ethnic Russian respondents among them is also lower compared to those who moved to the country in the 1990s. Distinctions in human capital lead to differences in earnings between the two groups of immigrants.