Social Class and Wages in post-Soviet Russia Alexey Bessudnov DPhil candidate St.Antony's College CEELBAS seminar 30 May 2008 Please note that this is work in progress and should not be cited without the author’s permission

Why study class and income in Russia? Economic studies of income inequality. Large inequality (increasing in the 1990s, decreasing in the recent years). Studies of the gender wage gap. Very few research on the effect of social class on income (Gerber&Hout 1998, Bian&Gerber 2008 and a few applications in the studies of social mobility and educational stratification by Gerber). Adding sociological dimension to the literature on income inequality.‏ Main questions: what are the effects of class in Russia, validation of the existing class schemas for Russia. The effects of class may be different during the market transition compared to stable market economies.

Theory of class EGP schema, developed for cross-national research on social mobility; followed by ESEC (based on the same principles). Focus on employment relations. 1) proprietors vs. self-employed vs. employees, 2) type of the regulation of employment (service relationship vs. labour contract). Weberian approach. Class → economic life-chances (form of payment, job autonomy, job security, opportunities for promotion). Different from status and subjective class. Class and income: income is not the only thing, but we would expect some effect. Class is empirically derived from occupation, employment status and supervisory status.

Data International Social Survey Programme (ISSP), Russian part. Annual surveys for 14 years, Nationally representative sample, about 2000 individuals each year. Conducted by a Russian polling firm VTsIOM (Levada Centre), controlled internationally. Problems: small n (therefore, I have to pool the data for different years).

Wage inequality, Gini coefficient, ISSP People working full- time, age (men) and (women)‏

Wage dynamics, Mean wages, adjusted by inflation at the level of 2005

Class structure (EGP)‏

Dynamics of class structure 8 classes 1 – – –

Class and wages (1)‏ * Median income in groups, 1992 excluded, only working full-time, aged Median wages in groups, weighted, adjusted by inflation at the level of 2005

Variance of wages within classes , men , women

Multivariate analysis of wages OLS regression Dependent variable: logged monthly wages (not hourly), only working full-time, age restrictions. Independent variables:  Gender  Age and age squared  Education (five categories: primary to university degree)‏  Year  Type of organization (public sector – state enterprise – private)‏  Residence (city – town – countryside)‏  Region (North-West, Central, Volga, South, the Urals, Siberia/Far East)‏  Class (EGP schema, 8 classes)‏

OLS regression Dependent variable: logged monthly wages (adj, by inflation at the level of 2005). Sample: working full-time, (men), (women)‏ Data for 1998 dropped Reference categories: Gender: Male Education: secondary completed Class: unskilled manual Type of organization: public sector Type of residence: city Region: Central Years: 1997, 2002, 2005 (for three bands)‏

OLS regression: interpretation Gender: strong and significant negative effect of being female on wages. Predicted monthly wages in 2005 for a 40-year old man with a university degree from higher salariat who works in a private firm and lives in a big city in the Central region is rub. For a woman with the same characteristics – Education: positive effect of having a university degree compared to secondary completed. Type of organization: positive effect of working in a state enterprise and especially in a private firm compared to the public sector. Residence: negative effects of living in a towm and in particular in the countryside, compared to a big city. Region: negative effects of living in the Volga region, South and the Urals (compared to Central). No effect of living in North-West, Siberia/Far East (compared to Central).

OLS regression: class effects Effects of class (compared to unskilled workers, controlled by other variables)‏  Positive: higher and lower salariat, manual supervisor, skilled manual  No effect: intermediate, agricultural workers  Self-employed: small n A 40-year old man with completed secondary education who works in a private enterprise and lives in a city in the Southern region in 2005:  Semi- or unskilled worker – (rubles/month)‏  Higher salariat  Lower salariat  Manual supervisor  Skilled manual worker – The strength of the class effect by the variance explained (R squared)‏

Discussion and further research Class has a significant effect on wages. However, it is not the main determinant of wages in post-Soviet Russia. I focus on wages in this paper. But there are other forms of income (transfers from relatives and friends, transfers from the state, natural incomes). Personal vs. family income. Second job. Wage arrears are a separate form of income stratification (Gerber). There are other forms of economic life-chances that may be affected by class (job security, chances for promotion, chances for income mobility). Panel data (Russet and/or RLMS). Is EGP class schema applicable in the Russian case? Possible modifications: separate managers and professionals (Gerber). Is class the right unit of analysis for post-Soviet Russia? Occupations (Grusky)? What is the impact of class into overall income inequality (decomposition analysis)?