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Emerging ethnic wage gap: Estonia during political and economic transition

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  • Leping, Kristian-Olari
  • Toomet, Ott

Abstract

We analyse the ethnic wage gap in Estonia, a former Soviet republic and current EU member, which hosts a substantial Russian-speaking minority. The analysis covers a lengthy period from the final years of the Soviet Union until the first years of EU membership. We document the rise of a substantial wage gap among males in favour of the Estonian-speaking population. This result is robust with respect to controls for language skills, education, industry and occupation. The main factors causing the unexplained wage gap include different ethnicity-specific returns to education and working in the capital city. The gap for young and established workers is of equal size. We argue that the most plausible explanations are establishment-level segregation, possibly related to sorting and screening discrimination. Unobserved human capital, related to the segregated school system, may also play a certain role. Journal of Comparative Economics 36 (4) (2008) 599-619.

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  • Leping, Kristian-Olari & Toomet, Ott, 2008. "Emerging ethnic wage gap: Estonia during political and economic transition," Journal of Comparative Economics, Elsevier, vol. 36(4), pages 599-619, December.
    • Handle: RePEc:eee:jcecon:v:36:y:2008:i:4:p:599-619
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    4. Jaanika Meriküll & Pille Mõtsmees, 2017. "Do you get what you ask? The gender gap in desired and realised wages," International Journal of Manpower, Emerald Group Publishing Limited, vol. 38(6), pages 893-908, September.
    5. Toomet, Ott & Van Der Leij, Marco & Rolfe, Meredith, 2013. "Social networks and labor market inequality between ethnicities and races," Network Science, Cambridge University Press, vol. 1(3), pages 321-352, December.
    6. Olle Järv & Anu Masso & Siiri Silm & Rein Ahas, 2021. "The Link Between Ethnic Segregation and Socio‐Economic Status: An Activity Space Approach," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 112(3), pages 319-335, July.
    7. Kerly Krillo & Jaan Masso, 2010. "The Part-Time/Full-Time Wage Gap in Central and Eastern Europe: the Case of Estonia," Research in Economics and Business: Central and Eastern Europe, Tallinn School of Economics and Business Administration, Tallinn University of Technology, vol. 2(1).
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    10. Prosper F. Bangwayo‐Skeete & Precious Zikhali, 2011. "Social exclusion and labour market outcomes: evidence from Eastern Europe and Central Asia," International Journal of Development Issues, Emerald Group Publishing Limited, vol. 10(3), pages 233-250, September.
    11. Merike Kukk & Karsten Staehr, 2014. "Income underreporting by households with business income: evidence from Estonia," Post-Communist Economies, Taylor & Francis Journals, vol. 26(2), pages 257-276, June.
    12. Thanh-Tam Nguyen-Huu, 2021. "Do “inferior” jobs always suffer from a wage penalty? Evidence from temporary workers in Cambodia and Pakistan," Post-Print hal-04248181, HAL.
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    15. Muravyev, Alexander & Talavera, Oleksandr, 2016. "Can state language policies distort students’ demand for education?," Journal of Comparative Economics, Elsevier, vol. 44(2), pages 383-399.
    16. Merike Kukk & Karsten Staehr, 2014. "Identification of Income Underreporting by the Self-Employed: Employment Status or Reported Business Income?," TUT Economic Research Series 8, Department of Finance and Economics, Tallinn University of Technology.
    17. World Bank, 2015. "Promoting Labor Market Participation and Social Inclusion in Europe and Central Asia's Poorest Countries," World Bank Publications - Reports 22501, The World Bank Group.
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    19. Shahiri, Hazrul Izuan, 2012. "An Analysis of the Reduction of the Ethnic Economic Gap in Malaysia under the New Economy Policy: Evidence from Ethnic Occupation Segregation and Wage Differential," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 46(2), pages 127-139.
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    21. Fazekas Nikolett & Fábián Attila & Nagy Anikó, 2017. "Analysis of Cross-Border Regional Homogeneity and Its Effects on Regional Resilience and Competitiveness: With the Western Transdanubian region (HUN) and Burgenland (AUT) as examples," Acta Universitatis Sapientiae, Economics and Business, Sciendo, vol. 5(1), pages 5-28, November.
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    24. Jaan Masso & Kerly Krillo, 2011. "Labour Markets In The Baltic States During The Crisis 2008-2009: The Effect On Different Labour Market Groups," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 79, Faculty of Economics and Business Administration, University of Tartu (Estonia).
    25. Kenneth Smith, 2011. "Labor force participation in the Soviet and post-Soviet Baltic States," Economic Change and Restructuring, Springer, vol. 44(4), pages 335-355, November.

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