at the primary place of work in at least five rounds of the survey (and have

at least one observation on the other variables included in the regressions).

If both parents report earnings and education the parent with the higher

income is used.

Equation (3) consists of the same variables as equation (2) except for

the omission of parents’earnings and the inclusion of occupational dummies.

The equation may contain parents who do not have income data and were

therefore not present in the estimation of equation (2). In this case the education

of the father is used or, if not available, that of the mother. Equation

(4) is estimated on two different samples. The first sample is in column 3

of Table 5 and is for sons and fathers. The second, in column 4, estimates

equations for daughters and fathers. Equation (5) repeats the estimation of

equation (4) but also includes the father’s earnings.

The variations in the mean values reported in Table 5 are not large but

some comments are in order about the earnings variables and their implications

for other variables. The mean year of birth is especially sensitive to the

presence of earnings in the specification, given our way of averaging earnings

over five years. When earnings are in the equation the sample includes

only individuals who have reported earnings in at least five rounds of the

survey. As the probability that young people report earnings increases with

age, whereas for older people it decreases with age, the inclusion of earnings

of children raises the mean age, whereas the inclusion of parents’earnings

lowers the mean age. This explains the differences in mean age across the

columns in Table 5.

Finally we need to point out a caveat about the RLMS survey, which does

not chase individuals who change locality. If family networks and labour

market influences are stronger in the family’s local area, persons who move

out should expect a diminished impact of parents’ networks on their own

income. As internal migration in Russia is low, however, this should not

introduce a serious bias in our estimates but it should be noted that our

estimates are for parents and children who live in the same locality.


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