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Regional disparities in labor market performance in Croatia : the role of individual and regional structural characteristics

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  • Xubei Luo
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    Abstract

    The labor market performance in Croatia failed to keep pace with the moderately good overall macroeconomic development in the past few years. Youth, the less well-educated, and women face more difficulties in getting a job with a decent salary. A large part of the difference in regional labor market performance is associated with the difference in the human capital endowment. With a stagnant total employment rate, the large disparities in employment and earnings across individual groups and regions have become one of the concerns for the long-term sustainable development of the economy. Using Labor Force Survey (LFS) data from 2002-04, this paper studies the labor market performance in Croatia at the national and regional levels. The results show that both one's individual characteristics (including age, education and gender) and where he or she works plays a role in his or her employment and earnings. Regional differences in employment and earnings are reduced to a large extent when accounting for differences in individual characteristics. The simulations shed light on the effectiveness of the nationwide education policy and regional specific labor market policy, and suggest that improving human capital endowment and adjusting labor market structure are both important to rebalance regional development and enhance total welfare.

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    Bibliographic Info

    Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4148.

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    Date of creation: 01 Mar 2007
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    Handle: RePEc:wbk:wbrwps:4148

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    Keywords: Labor Markets; Access&Equity in Basic Education; Population Policies; Education For All; Gender and Education;

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    1. Gronau, Reuben, 1974. "Wage Comparisons-A Selectivity Bias," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 82(6), pages 1119-43, Nov.-Dec..
    2. Oaxaca, Ronald L. & Ransom, Michael R., 1994. "On discrimination and the decomposition of wage differentials," Journal of Econometrics, Elsevier, vol. 61(1), pages 5-21, March.
    3. James J. Heckman, 1976. "The Common Structure of Statistical Models of Truncation, Sample Selection and Limited Dependent Variables and a Simple Estimator for Such Models," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 5, number 4, pages 475-492 National Bureau of Economic Research, Inc.
    4. 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.
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