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“It's not that I'm a racist, it's that they are Roma”: Roma discrimination and returns to education in South Eastern Europe

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  • Niall O'Higgins

Abstract

Purpose – This paper uses a unique survey of Roma and non-Roma in South Eastern Europe with the aim of evaluating competing explanations for the poor performance of Roma in the labour market. Design/methodology/approach – Following a descriptive analysis, econometric models are employed to identify the determinants of educational achievement, employment and wages for Roma and non-Roma. Limited information maximum likelihood (LIML) methods are employed to control for endogenous schooling and two sources of sample selection bias in the estimates. Non-linear and linear decomposition techniques are applied in order to identify the extent of discrimination. Findings – The key results are that: the employment returns to education are lower for Roma than for non-Roma whilst the wage returns are broadly similar for the two groups; the similar wage gains translate into a smaller absolute wage gain for Roma than for non-Roma given their lower average wages; the marginal absolute gains from education for Roma are only a little over one-third of the marginal absolute gains to education for majority populations; and, there is evidence to support the idea that a substantial part of the differential in labour market outcomes is due to discrimination. Research limitations/implications – The survey data employed do not include information on hours worked. In order to partially control for this, the analysis of wages is limited to employee wages excluding the self-employed. Practical implications – Explanations of why Roma fare so badly tend to fall into one of two camps: the “low education” and the “discrimination” schools. The analysis suggests that both of these explanations have some basis in fact. Moreover, a direct implication of the lower absolute returns to education accruing to Roma is that their lower educational participation is, at least in part, due to rational economic calculus. Consequently, policy needs to address both low educational participation and labour market discrimination contemporaneously. Originality/value – This is the first paper to attempt to econometrically distinguish between discrimination and educational explanations of Roma disadvantage in the labour market in Central and Eastern Europe. The survey data employed are unique and appropriate for the task. Unusually for analyses dealing with returns to education, the LIML econometric approach employed controls for both endogenous schooling and two sources of sample selection bias.

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Bibliographic Info

Article provided by Emerald Group Publishing in its journal International Journal of Manpower.

Volume (Year): 31 (2010)
Issue (Month): 2 ( May)
Pages: 163-187

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Handle: RePEc:eme:ijmpps:v:31:y:2010:i:2:p:163-187

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Keywords: Discrimination; Education; Ethnic minorities; Europe; Labour market;

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References

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  1. David Roodman, 2009. "Estimating Fully Observed Recursive Mixed-Process Models with cmp," Working Papers 168, Center for Global Development.
  2. Psacharopoulos, George & Patrinos, Harry Anthony, 2002. "Returns to investment in education : a further update," Policy Research Working Paper Series 2881, The World Bank.
  3. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
  4. Dena Ringold & Mitchell A. Orenstein & Erika Wilkens, 2005. "Roma in an Expanding Europe : Breaking the Poverty Cycle," World Bank Publications, The World Bank, number 14869, July.
  5. Psacharopoulos, George, 1993. "Returns to investment in education : a global update," Policy Research Working Paper Series 1067, The World Bank.
  6. Thomas N. Daymonti & Paul J. Andrisani, 1984. "Job Preferences, College Major, and the Gender Gap in Earnings," Journal of Human Resources, University of Wisconsin Press, vol. 19(3), pages 408-428.
  7. Colm Harmon & Hessel Oosterbeek & Ian Walker, 2003. "The Returns to Education: Microeconomics," Journal of Economic Surveys, Wiley Blackwell, vol. 17(2), pages 115-156, 04.
  8. Thomas Bauer & Mathias Sinning, 2006. "An Extension of the Blinder-Oaxaca Decomposition to Non-Linear Models," RWI Discussion Papers 0049, Rheinisch-Westfälisches Institut für Wirtschaftsforschung.
  9. Florence Jaumotte, 2003. "Female Labour Force Participation: Past Trends and Main Determinants in OECD Countries," OECD Economics Department Working Papers 376, OECD Publishing.
  10. Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863 Elsevier.
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Cited by:
  1. O'Higgins, Niall & Brüggemann, Christian, 2013. "The Consequences of Cumulative Discrimination: How Special Schooling Influences Employment and Wages of Roma in the Czech Republic," IZA Discussion Papers 7668, Institute for the Study of Labor (IZA).
  2. Penka Kovacheva, 2011. "Human capital and wage inequality during transition: evidence from Bulgaria," Post-Communist Economies, Taylor & Francis Journals, vol. 23(2), pages 237-255.
  3. O'Higgins, Niall, 2013. "Ethnicity and Gender in the Labour Market in Central and South East Europe," IZA Discussion Papers 7667, Institute for the Study of Labor (IZA).
  4. Drydakis, Nick, 2011. "Roma Women in Athenian Firms: Do They Face Wage Bias?," IZA Discussion Papers 5732, Institute for the Study of Labor (IZA).
  5. Stacy J. Kosko, 2012. "Educational Attainment and School-to-work Conversion of Roma in Romania: Adapting to Feasible Means or Ends?," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 13(3), pages 415-450, August.
  6. Claudia Trentini, 2014. "Ethnic patterns of returns to education in Bulgaria," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 22(1), pages 105-137, 01.
  7. 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.

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