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The Russian–Ukrainian earnings divide

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

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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Article provided by The European Bank for Reconstruction and Development in its journal Economics of Transition.

Volume (Year): 20 (2012)
Issue (Month): 1 (01)
Pages: 1-35

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Handle: RePEc:bla:etrans:v:20:y:2012:i:1:p:1-35
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  1. Hartmut Lehmann & Norberto Pignatti & Jonathan Wadsworth, 2005. "The Incidence and Cost of Job Loss in the Ukrainian Labor Market," CERT Discussion Papers 0504, Centre for Economic Reform and Transformation, Heriot Watt University.
  2. 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.
  3. 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.
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  7. 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).
  8. 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).
  9. 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.
  10. 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.
  11. Andrew Tiffin, 2006. "Ukraine; The Cost of Weak Institutions," IMF Working Papers 06/167, International Monetary Fund.
  12. 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).
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