Explaining Wages in Ukraine: Experience or Education?

Abstract

In this article, we analyze a large database of job vacancies in Ukraine, webscrapped from Work.ua website in January–February 2017. The obtained dataset was processed with bag-of-words approach. Exploratory data analysis revealed that experience and city influence wages. For example, wages in the capital are much higher than in other cities. To explain variation in wages, we used three models to predict wages: multiple linear regression, decision tree and random forest; the latter has demonstrated the best explanatory power. Our work has confirmed the old finding by Mincer that experience is an important variable that explains wages. In fact, this factor was the most informative. Education, however, was an unimportant factor to determine wages. English, teamwork, sales skills, car driving and programming languages are the skills for which modern employers are willing to pay.