“Physicists” and “lyricists”: Whom the Russian labor market values higher?

Abstract

In this study, we raise a simple question: do STEM (Science, Technology, Engineering and Math) education and employment provide a monetary return to professionals with this specialization and holding STEM jobs? If yes, what is the premium across ages and cohorts? We compare wages of professionals with the STEM education and without it, holding STEM jobs and those working in alternative positions, and with various combinations of education and jobs. We estimate premiums for the whole sample as well as for different age groups and cohorts. For this, we use various large data sets with variables for college majors and occupational positions. The main conclusion is that the STEM specialization brings no significant benefits compared to non-STEM majors and jobs. The premium does not emerge over experience or age; moreover, older groups engaged in STEM-related work tend to experience a wage penalty. As we move from younger to older age cohorts, the wage growth declines which means that wages for younger age cohorts catch up and take over the older ones, even if they were initially lower. These results are reproduced on all available datasets.