Patterns of Discrimination in the Romanian Labor Market: The Impact of Gradual Exposure to Various Labor Markets within the European Union

Discrimination under its various manifestations will always represent a contemporary current issue. Discrimination's expressions emerge when a group of individuals sharing common characteristics (such as religious convictions, certain race or gender, etc) is discriminated regardless their own labor productivity. The empirical data demonstrated that differences in productivity are not entirely explained by the income differences between men and women. G. Becker (1971) was the founder of the modern economic theory of discrimination, which was developed later by Arrow (1973). The two researchers considered that people tend to have different behaviors pattern related to the people they work with, to supervisors and buyers and ultimately they claim compensation in order to work with the members of such a discriminated group. The main focus in the specialized literature was to understand how authority is distributed in accordance with sex, religion, race, ethnic group, age, etc (H.L.Moore-1988). Discrimination may be generated both by employer and employee when the latter refuse to work with a certain group or claim for a supplementary compensation in order to work with it. In Romania, discrimination is still widely spread mainly in rural areas. The occupational ratio for men was 64,6% compared to 53% for women according to data provided by EUROSTAT in 2006. The equality of chances between men and women persist on fairly low levels according to the "The Global Gender Gap Report 2006" issued by World Economic, Forum in 2006. Romania is ranked 46 among a list of 115 countries, having the same score as Ukraine, Uganda and Trinidad-Tobago. Romania is well ranked in the field of education and health areas. In spite of this, Romania registers a low level in case of representation of women at political level, in terms of salary policy, as the authors emphasize that the ratio between woman's salary and man's salary represents 0.64. As stated by the euro barometer of European Commission published in July 2006, the most common forms of discrimination are: ethnic discrimination (64%), disability discrimination (53%), sexual orientation discrimination (50%), age discrimination (46%), religion discrimination (44%), gender discrimination (40%). In terms of worker's gender discrimination Italy and Spain recorded the highest level: 56% in case of Italy and 51% in case of Spain. Romania also registered a high level of discrimination of approximately 32%. Disparities between men's wages and women's wages are determined by level of qualifications and hierarchical position at work place. Statistical data published by EUROSTAT for 2007 showed that women's average income is 13% lower than men's as worked performed is similar to men's. The current paper has as main objective to study the structural changes in Romania, which have influenced the salary differences between men and women on the labor market. Key words: discrimination, labor market, asymmetric information, and occupation rate.JEL: J01, J15, 16This paper was presented on May 23, 2008, at the 18th International Conference of the International Trade and Finance Association, meeting at Universidade Nova de Lisboa, Lisbon, Portugal.