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Emerging ethnic wage gap: Estonia during political and economic transition

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  • Leping, Kristian-Olari
  • Toomet, Ott
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    Abstract

    We analyse the ethnic wage gap in Estonia, a former Soviet republic and current EU member, which hosts a substantial Russian-speaking minority. The analysis covers a lengthy period from the final years of the Soviet Union until the first years of EU membership. We document the rise of a substantial wage gap among males in favour of the Estonian-speaking population. This result is robust with respect to controls for language skills, education, industry and occupation. The main factors causing the unexplained wage gap include different ethnicity-specific returns to education and working in the capital city. The gap for young and established workers is of equal size. We argue that the most plausible explanations are establishment-level segregation, possibly related to sorting and screening discrimination. Unobserved human capital, related to the segregated school system, may also play a certain role. Journal of Comparative Economics 36 (4) (2008) 599-619.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Comparative Economics.

    Volume (Year): 36 (2008)
    Issue (Month): 4 (December)
    Pages: 599-619

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    Handle: RePEc:eee:jcecon:v:36:y:2008:i:4:p:599-619

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    Web page: http://www.elsevier.com/locate/inca/622864

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    Keywords: Wage decomposition Ethnicity Estonia Former Soviet Union;

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    Cited by:
    1. Prosper F. Bangwayo-Skeete & Precious Zikhali, 2011. "Social exclusion and labour market outcomes: evidence from Eastern Europe and Central Asia," International Journal of Development Issues, Emerald Group Publishing, Emerald Group Publishing, vol. 10(3), pages 233-250, September.
    2. Ott Toomet & Marco van der Leij & Meredith Rolfe, 2012. "Social Networks and Labor Market Inequality between Ethnicities and Races," Tinbergen Institute Discussion Papers, Tinbergen Institute 12-120/II, Tinbergen Institute.
    3. Laur Lilleoja & Willem Saris, 2014. "Testing a New Operationalization of the Basic Values on Estonian- and Russian-speaking Subpopulations in Estonia," Social Indicators Research, Springer, Springer, vol. 116(1), pages 153-172, March.
    4. Aristei, David & Perugini, Cristiano, 2012. "Inequality and reforms in transition countries," Economic Systems, Elsevier, Elsevier, vol. 36(1), pages 2-10.
    5. Kenneth Smith, 2011. "Labor force participation in the Soviet and post-Soviet Baltic States," Economic Change and Restructuring, Springer, Springer, vol. 44(4), pages 335-355, November.
    6. Merike Kukk & Karsten Staehr, 2013. "Income underreporting by households with business income. Evidence from Estonia," Bank of Estonia Working Papers, Bank of Estonia wp2013-6, Bank of Estonia, revised 26 Jul 2013.
    7. Ott Toomet & Marco van der Leij & Meredith Rolfe, 2012. "Social Networks and Labor Market Inequality between Ethnicities and Races," Tinbergen Institute Discussion Papers, Tinbergen Institute 12-120/II, Tinbergen Institute.
    8. Zuzana Brixiova, 2009. "Labour Market Flexibility In Estonia: What More Can Be Done?," William Davidson Institute Working Papers Series, William Davidson Institute at the University of Michigan wp964, William Davidson Institute at the University of Michigan.
    9. Jaan Masso & Kerly Krillo, 2011. "Labour Markets In The Baltic States During The Crisis 2008-2009: The Effect On Different Labour Market Groups," University of Tartu - Faculty of Economics and Business Administration Working Paper Series, Faculty of Economics and Business Administration, University of Tartu (Estonia) 79, Faculty of Economics and Business Administration, University of Tartu (Estonia).
    10. Kerly Krillo & Jaan Masso, 2010. "The Part-Time/Full-Time Wage Gap In Central And Eastern Europe: The Case Of Estonia," University of Tartu - Faculty of Economics and Business Administration Working Paper Series, Faculty of Economics and Business Administration, University of Tartu (Estonia) 65, Faculty of Economics and Business Administration, University of Tartu (Estonia).

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