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The Russian-Ukrainian Earnings Divide

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  • Amelie Constant
  • Martin Kahanec
  • Klaus F. Zimmermann

Abstract

Ethnic differences are often considered to be powerful sources of diverse economic behavior. In this paper, we investigate whether and how ethnicity affects Ukrainian labor market outcomes. Using micro data from the Ukrainian Longitudinal Monitoring Survey (ULMS) and Oaxaca-Blinder decomposition of earnings, we find a persistent and rising labor 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 favoring Russians. Our findings further document that this premium is larger among males than among females.

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File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.44736.de/dp627.pdf
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Bibliographic Info

Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 627.

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Length: 25 p.
Date of creation: 2006
Date of revision:
Handle: RePEc:diw:diwwpp:dp627

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Keywords: Ethnicity; earnings differences; discrimination; transitional labor markets; ethnic premium;

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References

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  1. 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).
  2. 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).
  3. Gorodnichenko, Yuriy & Peter, Klara Sabirianova, 2004. "Returns to Schooling in Russia and Ukraine: A Semiparametric Approach to Cross-Country Comparative Analysis," IZA Discussion Papers 1325, Institute for the Study of Labor (IZA).
  4. Ganguli, Ina & Terrell, Katherine, 2005. "Institutions, Markets and Men's and Women's Wage Inequality: Evidence from Ukraine," IZA Discussion Papers 1724, Institute for the Study of Labor (IZA).
  5. Trejo, Stephen J, 1997. "Why Do Mexican Americans Earn Low Wages?," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 105(6), pages 1235-68, December.
  6. 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.
  7. Joseph G. Altonji & Rebecca M. Blank, . "Race and Gender in the Labor Market," IPR working papers, Institute for Policy Resarch at Northwestern University 98-18, Institute for Policy Resarch at Northwestern University.
  8. Card, David & Lemieux, Thomas, 1994. "Changing Wage Structure and Black-White Wage Differentials," American Economic Review, American Economic Association, American Economic Association, vol. 84(2), pages 29-33, May.
  9. David Neumark, 1988. "Employers' Discriminatory Behavior and the Estimation of Wage Discrimination," Journal of Human Resources, University of Wisconsin Press, vol. 23(3), pages 279-295.
  10. Andrew Tiffin, 2006. "Ukraine," IMF Working Papers, International Monetary Fund 06/167, International Monetary Fund.
  11. 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.
  12. 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, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
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Citations

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Cited by:
  1. 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, Emerald Group Publishing, vol. 30(1/2), pages 97-115, May.
  2. Constant, Amelie F. & Kahanec, Martin & Zimmermann, Klaus F., 2006. "The Russian-Ukrainian Political Divide," IZA Discussion Papers 2530, Institute for the Study of Labor (IZA).
  3. 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, Faculty of Economics and Business Administration, University of Tartu (Estonia) 53, Faculty of Economics and Business Administration, University of Tartu (Estonia).
  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, Institute for the Study of Labor (IZA) 16, Institute for the Study of Labor (IZA).
  5. Muravyev, Alexander & Talavera, Oleksandr, 2010. "Can State Language Policies Distort Students' Demand for Higher Education?," IZA Discussion Papers 5411, Institute for the Study of Labor (IZA).
  6. Lehmann, Hartmut & Muravyev, Alexander & Zimmermann, Klaus F., 2012. "The Ukrainian Longitudinal Monitoring Survey: Towards a Better Understanding of Labor Markets in Transition," IZA Discussion Papers 7090, Institute for the Study of Labor (IZA).

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