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Decomposing Income Differentials Between Roma And Non-Roma In South East Europe


  • Susanne Milcher

    () (Vienna University of Economics and Business,Austria)


The paper decomposes average income differentials between Roma and non-Roma in South East Europe into the component that can be explained by group differences in income-related characteristics (characteristics effect), and the component which is due to differing returns to these characteristics (coefficients or discrimination effect). The decomposition analysis is based on Blinder (1973) and Oaxaca (1973) and uses three weighting matrices, reflecting the different assumptions about income structures that would prevail in the absence of discrimination. Heckman (1979) estimators control for selectivity bias. Using microdata from the 2004 UNDP household survey on Roma minorities, the paper finds that a large share of the average income differential between Roma and non-Roma is explained by human capital differences. Nevertheless, significant labour market discrimination is found in Kosovo for all weight specifications, and in Bulgaria and Serbia for two weight specifications.

Suggested Citation

  • Susanne Milcher, 2011. "Decomposing Income Differentials Between Roma And Non-Roma In South East Europe," Romanian Journal of Regional Science, Romanian Regional Science Association, vol. 5(1), pages 27-53, JUNE.
  • Handle: RePEc:rrs:journl:v:5:y:2011:i:1:p:27-53

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    References listed on IDEAS

    1. Jula, Dorin & Jula, Nicolae Marius, 2009. "Regional Economic Voting In Romania," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 6(1), pages 5-15, March.
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    Cited by:

    1. O'Higgins, Niall & Br├╝ggemann, Christian, 2013. "The Consequences of Cumulative Discrimination: How Special Schooling Influences Employment and Wages of Roma in the Czech Republic," IZA Discussion Papers 7668, Institute for the Study of Labor (IZA).
    2. O'Higgins, Niall, 2013. "Ethnicity and Gender in the Labour Market in Central and South East Europe," IZA Discussion Papers 7667, Institute for the Study of Labor (IZA).

    More about this item


    Labour market discrimination; income differential decomposition; Heckman selection model; Roma; Europe;

    JEL classification:

    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe


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