The Impact of Sectoral Segregation on the Earning Differential between Natives and Immigrants in Russia

Evgeniya Polyakova and Larisa Smirnykh

HSE Working papers from National Research University Higher School of Economics

Abstract: Using nationally representative data (RMLS-NRU HSE) from 2004-2012, this paper examines sectoral segregation between immigrant (persons with an immigration background) and native workers and its impact on the earning differential in Russia. This is the first micro-level study in Russia about sectoral segregation and the earning gap between natives and immigrants under its influence. In this study we analyze the determinants of the choice of sector, estimate earning differences between natives and immigrants, define the Duncan index of dissimilarity and measure the impact of sectoral segregation on the earning differential between natives and immigrants using Oaxaca-Blinder decomposition.Our results show that sectoral segregation in the Russian labor market gradually increased from 2004 to 2012. We find there are significant earning differences between immigrants and natives. Most of this difference cannot be explained by productivity-related differences between the two groups. This implies that immigrants can experience labor market discrimination. After partly assessing the self-selection of worker’s using the extended decomposition method (Brown et al., 1980) our empirical results demonstrate that the sectoral segregation (or voluntary distribution across sectors) plays a considerable role in the earning differential between natives and migrants in Russia.

Keywords: immigrant workers; sectoral segregation; employment; earning differentials; labor demand; Russia (search for similar items in EconPapers)
JEL-codes: J15 J21 J23 J31 J61 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2015
New Economics Papers: this item is included in nep-cis, nep-mig and nep-tra
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Published in WP BRP Series: Economics / EC, November 2015, pages 1-29

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Persistent link: https://EconPapers.repec.org/RePEc:hig:wpaper:110/ec/2015

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