Katarina Katz

Were there no returns to education in the USSR? Estimates from Soviet-period household data

Abstract The relation between wages and schooling in the USSR is studied, by estimating log–linear wage-equations for a sample of a Russian city in 1989. Estimates, made separately for men and women, show that there were rewards to education, contrary to claims by many Soviet and Western scholars. The low wages of some professionals, relative to skilled workers, were partly caused by gender differentials, partly by excess demand for manual labour. In addition, private costs of schooling were low and there were important non-monetary incentives connected with higher education.

Wage Differentials and Gender Discrimination: : Changes in Sweden 1981-98

The purpose of this article is to follow the development of the Swedish gender earnings gap through the 1980s and 1990s. We follow the changes in the wage gap and in factors to which it can be related year-by-year by analysing crosssectional data from Statistics Sweden (HEK) for the years 1981 and 1983–98. The results show that the unadjusted wage gap varied between 12 and 15 per cent of the average male wage up to 1989, when the differentials began to increase. During the 1990s the size of the gap was around 14–18 per cent. In a decomposition analysis we find that the measured differences in jobs and qualifications between women and men can account only for between two-fifths and three-fifths of the gender wage gap, if they are assumed to be rewarded according to the male wage function. If the female wage function is applied, even less of the differentials are explained. Differences in the educational requirements for jobs have contributed considerably to gender earnings inequality. The impact has decreased over the period studied, however, and is about half as large in the 1990s as it was in the 1980s.

Why Do Some Young Adults Not Graduate from Upper Secondary School? On the Importance of Signals of Labour Market Failure

ABSTRACT In high-income countries, not completing secondary school often entails a high risk of social exclusion. Using data on young adults born in 1985 who grew up in metropolitan Sweden, we study factors associated with not graduating from upper-secondary school at age 21. Our hypothesis is that if a young person sees examples of people who are not able to earn a living despite having a long education, such negative examples are influential. Results from estimated logistic models are consistent with the hypothesis.

Women and Men in Taganrog and in the USSR

This study is based on a survey carried out in the southern Russian city of Taganrog. Taganrog is a port on the Azov Sea, which is linked to the Black Sea by a narrow strait. It is in the Rostov region (oblast’) and thus not far from the Ukrainian border. Soviet Taganrog was an industrial city, dominated by a few large industries linked to the so-called ‘military industrial complex’. In 1989 it had a population of approximately 300,000. The region is among the richer agricultural districts of the USSR, and this was reflected in better availability and quality of foodstuffs than in most of Russia.

Soviet Wages and Salaries

The institutional context of Soviet wage formation is obviously very different from that which is envisaged by neoclassical economic theory, as well as from the capitalist mode of production that Marx analysed. The assumption, discussed in the preceding chapter - that at the margin, wages should equal productivity - is deduced from an assumption that firms maximise profits. Irrespective of whether one accepts this theory, as applied to capitalist firms, or not, profit-maximisation was clearly not a good approximation of the behaviour of Soviet enterprises. In the USSR, there were centrally determined wage rates. Implicit ‘wage-bargaining’ took place when these were applied locally. Bonuses, which were a substantial part of earnings, were determined at enterprise level, albeit subject to official regulations. Hence, as will be discussed here and in chapter 6, wage formation was the outcome of a complex interplay of local and central forces, regulations and demand and supply pressures.

Gender, Discrimination and Western Economic Theory

Practically all studies from all countries show that women’s average earnings are lower than those of men. The size of this gender gap varies across time and place and depends on what exactly the averages are taken of - of wages per year or per hour, all wages, or wages of full-time employed. If hours of work, or job, worker or enterprise characteristics are controlled for, the gap is reduced. But a gap there is, and it always has the same sign.

Pay and Education

It is a common view that wage differentials during the Soviet period were too narrow and that this contributed to the inefficiency of the Soviet economy. In particular, the economic incentives for acquiring education were considered very small (Gordon, 1987, Rimashevskaia and Onikov, 1991). The views of Western researchers were mixed, but many agreed. (Ofer and Vinokur, 1992, can be cited as an exception.) Granick (1987) claims that returns to education in the USSR were negative, while Chapman (1988) describes ‘wage-levelling’ as a problem for the Soviet economy.

The Wages of Soviet Women and Men

In the first part of this section the sub-sample available for wage estimations is presented. Since the wage and wage rate variables are the foundation for the subsequent analysis and conclusions, some problems with their measurement are stated in section 5.1.2 (and treated in more detail in the appendix). Section 5.1.3 describes the explanatory variables used. Section 5.1 is important for assessing the validity of the study. It is possible, however, for the reader to proceed directly to section 5.2 with the help of the list of variables in Table A5.1.

Taganrog Post-USSR: Patriarchy, Poverty, Perspectives

Earlier chapters have shown some of the many reasons why one should not idealise life in the USSR or regret the demise of the Soviet order. The old days were bad, but, nevertheless, conditions of life have deteriorated drastically for many Russians. In the wake of ‘market reform’, poverty, social tension, stress and insecurity have taken a tragic toll in terms of well being, health and life expectancy. The labour market is only a part of this scenario, but an essential one on which the majority depend for their livelihood and for important elements of their identity, their status and self-esteem and for social relations well beyond those in the workplace itself.