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Does the Migrants' Education Level Affect Wage Convergence in Russian Regions?

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Experts from the Higher School of Economics have determined that the domestic migration increases the speed of wage convergence Russian Regions. Further, the impact of migration on this process depends on migrants’ education level. The results of the HSE study were published in the journal Issues in Economics (Voprosy ekonomiki).

Larisa Smirnykh, the Deputy Head of the Laboratory for Labour Market Studies, and post-graduate student Nuriya Buranshina analysed 77 regions in Russia using interregional migration data from Rosstat. Two samplings were put together for analysis — 2002-2010 and 2011-2016. This is because changes were made to the migrant registration methodology in 2011.

Analysis of the data showed that in 2002-2010, between 1.4 million and 1.6 million people migrated in Russia, representing around 1% of the population. In 2011-2016, migration figures rose to 3.54 million people in 2016, or roughly 2% of the overall population. This growth may partly result from changes in 2011 to migrant’s registration methodology (added to the group of migrants residing in a different region for more than a year were those who had been there for more than nine months).

Over the course of all the years under review, domestic migrants were varied in terms of education level. In 2002-2010, most migrants had a secondary education or lower, while the smallest percentage had a higher education. Between 2002 and 2010, the migration level fell for the first two groups, while for the third was a gradual increase. As a result, after 2009 the percentage of migrants with a college degree (31.47%) was practically the same as the percentage of migrants with a secondary vocational degree (31.31%) and not far from the percentage of migrants with a high school diploma or below (37.22%).

The results of these calculations allowed HSE researchers to conclude that domestic migration has a positive effect on the speed of wage convergence in the regions. This occurred because wages in certain regions grew over time as a result of migrants leaving those regions. At the same time, if the influx of migrants exceeds the outflow, then average wages gradually decline in the region.

It was also determined that the wage convergence speed of regions depends on migrants’ level of education. The largest impact on this speed comes from migrants with a secondary vocational degree, as well as those with an incomplete and completed secondary education. Further, either migrants with a higher education do not have a significant impact (2002-2011) on convergence speed of wages in the regions or they slow down the wage speed convergence of regions (2011-2016). Researchers link this to the relatively low number of migrants overall, as well as to relatively low demand for them in the regions. As a result, migrants with a higher education who leave the regions do not cause wages to rise in those regions. Meanwhile, migrants with a secondary and secondary vocational education who leave the regions increase demand and as a result bring about an increase in wages.

In order to bring the regions even closer to one another in terms of wages, HSE researchers recommend lowering the barriers for migration. At the same time, it is important to increase migrants’ awareness of new jobs and the working conditions in the regions. Work policies should promote migration for those with a higher education. To do this, it is recommended for companies create stimuli in the form of subsidies or tax credits for the creating new and high-tech jobs for attracting a highly qualified workforce.

January 31