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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. Ott Toomet & Marco van der Leij & Meredith Rolfe, 2012. "Social Networks and Labor Market Inequality between Ethnicities and Races," Tinbergen Institute Discussion Papers 12-120/II, Tinbergen Institute.
    2. 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 79, Faculty of Economics and Business Administration, University of Tartu (Estonia).
    3. Merike Kukk & Karsten Staehr, 2013. "Income underreporting by households with business income. Evidence from Estonia," Bank of Estonia Working Papers wp2013-6, Bank of Estonia, revised 26 Jul 2013.
    4. 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 65, Faculty of Economics and Business Administration, University of Tartu (Estonia).
    5. 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, vol. 116(1), pages 153-172, March.
    6. Kenneth Smith, 2011. "Labor force participation in the Soviet and post-Soviet Baltic States," Economic Change and Restructuring, Springer, vol. 44(4), pages 335-355, November.
    7. Zuzana Brixiova, 2009. "Labour Market Flexibility in Estonia: What more Can be Done?," OECD Economics Department Working Papers 697, OECD Publishing.
    8. Aristei, David & Perugini, Cristiano, 2012. "Inequality and reforms in transition countries," Economic Systems, Elsevier, vol. 36(1), pages 2-10.
    9. 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, vol. 10(3), pages 233-250, September.
    10. Ott Toomet & Marco van der Leij & Meredith Rolfe, 2012. "Social Networks and Labor Market Inequality between Ethnicities and Races," Tinbergen Institute Discussion Papers 12-120/II, Tinbergen Institute.

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