The human capital and income of immigrants: evidence from Russia

Abstract

ABSTRACT This study examines how immigration flows caused by the disintegration of states and globalisation change the composition of the labour force and how human capital is transferred from countries of the former Soviet Union to Russia. We estimate the contribution of imperfect human capital transferability to explaining the immigrant–native income differentials by using the Russian Longitudinal Monitoring Survey of 2009–2012. The findings reveal that the income of foreign-born people who moved before the disintegration of the USSR is not significantly different from the income of native-born citizens. In contrast, foreign-born groups who immigrated to Russia after the disintegration of the USSR have lower incomes than the native-born group. In addition, the income premium on education and labour experience received in host countries of the foreign-born group is lower compared to the income premium on education and labour experience received in Russia. An important factor explaining the difference in income between natives and foreign-born people who moved to Russia after the collapse of the USSR is the imperfection in the mechanism of human capital transferability.