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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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Author Info
O'Higgins, Niall () (University of Salerno)

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Abstract

This paper uses a unique survey of Roma and non-Roma in South Eastern Europe to evaluate competing explanations for the poor performance of Roma in the labour market. The analysis seeks to identify the determinants of educational achievement, employment and wages for Roma and non-Roma. LIML methods are employed to control for endogenous schooling and two sources of sample selection bias in the estimates. Nonlinear and linear decomposition techniques are applied in order to identify the extent of discrimination. 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. Explanations of why Roma fare so badly tend to fall into one of two camps: 'low education' vs. 'discrimination'. 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 partially, due to rational economic calculus. Consequently, policy needs to address both low educational participation and labour market discrimination contemporaneously.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4208.

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Date of creation: Jun 2009
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Handle: RePEc:iza:izadps:dp4208

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Related research
Keywords: Roma; discrimination; transition; returns to education;

Find related papers by JEL classification:
C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models
J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities and Races; Non-labor Discrimination
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
P23 - Economic Systems - - Socialist Systems and Transition Economies - - - Factor and Product Markets; Industry Studies; Population

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  1. George Psacharopoulos & Harry Anthony Patrinos, 2004. "Returns to investment in education: a further update," Education Economics, Taylor and Francis Journals, vol. 12(2), pages 111-134, August. [Downloadable!] (restricted)
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  2. 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. [Downloadable!] (restricted)
  3. Psacharopoulos, George, 1994. "Returns to investment in education: A global update," World Development, Elsevier, vol. 22(9), pages 1325-1343, September. [Downloadable!] (restricted)
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  4. Colm Harmon & Hessel Oosterbeek & Ian Walker, 2003. "The Returns to Education: Microeconomics," Journal of Economic Surveys, Blackwell Publishing, vol. 17(2), pages 115-156, 04. [Downloadable!] (restricted)
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This page was last updated on 2009-11-9.

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