Vladimir Gimpelson1, Rostislav Kapeliushnikov1, Aleksey Oshchepkov1
  • 1 National Research University Higher School of Economics, 20 Myasnitskaya Str., Moscow, 101000, Russian Federation

Return to Tenure Revisited

2016. Vol. 20. No. 4. P. 553–587 [issue contents]

This study presents new estimates for returns to tenure for the Russian labour market. It exploits the RLMS-HSE panel data set that covers the period 1994–2014 and it differs from previous studies in a few important aspects. First, we try to account for the specifics of the transition period dividing the total observed tenure into two parts, where one part is the old one acquired before 1992 and the other part is newly accumulated since 1992. Second, we estimate the returns to tenure for employees in the private and the state sectors separately. Third, we apply alternative instrumentation techniques suggested by Altonji-Shakotko and by Topel and are the first who do this for the Russian labour market.

Our cross-section OLS estimates show that the return to tenure in the state sector has always been positive but in the private sector it has been positive since the mid – 2000s. In the private sector, the return to tenure is lower and the wage growth over the tenure stops earlier than in the state one. On average, the cumulative premium for 15 to 20 years of firm-specific experience makes about 20–25%, according to the OLS estimates. However, it disappears completely or even turns negative if endogeneity is addressed with use of the instruments. Our analysis suggests that existing knowledge of how tenure is valued in the Russian labour market needs to be revised.
Citation: Gimpel'son V., Kapeliushnikov R., Oshchepkov A. (2016) Premiya za spetsial'nyy stazh v Rossii: vozvrashchenie k teme [Return to Tenure Revisited]. HSE Economic Journal , vol. 20, no 4, pp. 553-587 (in Russian)
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