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The Russian-Ukrainian Earnings Divide

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  • Constant, Amelie
  • Kahanec, Martin
  • Zimmermann, Klaus F

Abstract

Ethnic differences are often considered to be powerful sources of diverse economic behaviour. In this paper, we investigate whether and how ethnicity affects Ukrainian labour market outcomes. Using micro data from the Ukrainian Longitudinal Monitoring Survey (ULMS) and Oaxaca-Blinder decomposition of earnings, we find a persistent and rising labour market divide between ethnic Russians and Ukrainians throughout Ukraine’s transition era. We establish that language rather than nationality is the key factor behind this ethnic premium favouring Russians. Our findings further document that this premium is larger among males than among females.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 5904.

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Date of creation: Oct 2006
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Handle: RePEc:cpr:ceprdp:5904

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Keywords: discrimination; earnings differences; ethnic premium; ethnicity; transitional labour markets;

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References

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  1. David Neumark, 1987. "Employers' discriminatory behavior and the estimation of wage discrimination," Special Studies Papers 227, Board of Governors of the Federal Reserve System (U.S.).
  2. Ganguli, Ina & Terrell, Katherine, 2006. "Institutions, markets and men's and women's wage inequality: Evidence from Ukraine," Journal of Comparative Economics, Elsevier, vol. 34(2), pages 200-227, June.
  3. Ganguli, Ina & Terrell, Katherine, 2005. "Wage Ceilings and Floors: The Gender Gap in Ukraine's Transition," IZA Discussion Papers 1776, Institute for the Study of Labor (IZA).
  4. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
  5. Constant, Amelie F. & Massey, Douglas S., 2003. "Labor Market Segmentation and the Earnings of German Guestworkers," IZA Discussion Papers 774, Institute for the Study of Labor (IZA).
  6. Altonji, Joseph G. & Blank, Rebecca M., 1999. "Race and gender in the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 48, pages 3143-3259 Elsevier.
  7. Card, David & Lemieux, Thomas, 1994. "Changing Wage Structure and Black-White Wage Differentials," American Economic Review, American Economic Association, vol. 84(2), pages 29-33, May.
  8. Trejo, Stephen J, 1997. "Why Do Mexican Americans Earn Low Wages?," Journal of Political Economy, University of Chicago Press, vol. 105(6), pages 1235-68, December.
  9. Gorodnichenko, Yuriy & Sabirianova Peter, Klara, 2005. "Returns to schooling in Russia and Ukraine: A semiparametric approach to cross-country comparative analysis," Journal of Comparative Economics, Elsevier, vol. 33(2), pages 324-350, June.
  10. Lehmann, Hartmut & Pignatti, Norberto & Wadsworth, Jonathan, 2006. "The incidence and cost of job loss in the Ukrainian labor market," Journal of Comparative Economics, Elsevier, vol. 34(2), pages 248-271, June.
  11. 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.
  12. Andrew Tiffin, 2006. "Ukraine," IMF Working Papers 06/167, International Monetary Fund.
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Citations

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Cited by:
  1. Hartmut Lehmann & Alexander Muravyev & Klaus Zimmermann, 2012. "The Ukrainian longitudinal monitoring survey: towards a better understanding of labor markets in transition," IZA Journal of Labor & Development, Springer, vol. 1(1), pages 1-15, December.
  2. Amelie Constant & Martin Kahanec & Klaus F. Zimmermann, 2006. "The Russian-Ukrainian Political Divide," Discussion Papers of DIW Berlin 656, DIW Berlin, German Institute for Economic Research.
  3. Martin Kahanec & Anzelika Zaiceva, 2009. "Labor market outcomes of immigrants and non-citizens in the EU: An East-West comparison," International Journal of Manpower, Emerald Group Publishing, vol. 30(1/2), pages 97-115, May.
  4. Zimmermann, Klaus F. & Kahanec, Martin & Constant, Amelie F. & DeVoretz, Don J. & Gataullina, Liliya & Zaiceva, Anzelika, 2008. "Report No. 16: Study on the Social and Labour Market Integration of Ethnic Minorities," IZA Research Reports 16, Institute for the Study of Labor (IZA).
  5. Kristjan-Olari Leping & Ott Toomet, 2007. "Ethnic Wage Gap And Political Break-Ups: Estonia During Political And Economic Transition," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 53, Faculty of Economics and Business Administration, University of Tartu (Estonia).
  6. Alexander Muravyev & Oleksandr Talavera, 2010. "Can State Language Policies Distort Students' Demand for Higher Education?," University of East Anglia Applied and Financial Economics Working Paper Series 023, School of Economics, University of East Anglia, Norwich, UK..

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