Digitalization and the Gender Wage Gap in Russia

Abstract

Using the data from RLMS-HSE and O*NET for 2003–2018, we examine the development of ICT skills and changes in digital requirements within occupations in the Russian labor market. The degree and pace of digitalization vary widely across occupations. Occupational segregation contributes to the fact that digitalization has different effects on the employment and earnings of men and women. Although the diffusion of digital technologies is an ongoing trend, the Russian workforce digitalized rapidly over the 15 years. We find growing demand for digital skills from employers, backed with a significant increase in the proportion of the working population using computers and the Internet. The average level of digital skills remains higher among women, although the gap halved between 2003 and 2018. The rapid digitalization of existing occupations was by far the main driver of digital transformation while emerging and disappearing occupations were playing a secondary role. Digital adoption has an independent and positive impact on earnings. Computer use is associated with increased pay; average wages, ceteris paribus, are higher in occupations with higher levels of digitalization. The correlation between computer use and wages weakens over time with the spread of basic digital skills. On the contrary, the relationship between wages and the digital scores of occupations had strengthened by 2018. Adding digital variables to the Oaxaca–Blinder decomposition widens the conditional gender pay gap, but digitalization has not become a new source of discrimination against women. The results are robust to changes in model assumptions and equation specifications.