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The Russian-Ukrainian Earnings Divide

  • Amelie 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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File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.44736.de/dp627.pdf
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Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 627.

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Length: 25 p.
Date of creation: 2006
Date of revision:
Handle: RePEc:diw:diwwpp:dp627
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  1. 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.
  2. 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).
  3. Hartmut Lehmann & Norberto Pignatti & Jonathan Wadsworth, 2005. "The Incidence and Cost of Job Loss in the Ukrainian Labor Market," Upjohn Working Papers and Journal Articles 05-122, W.E. Upjohn Institute for Employment Research.
  4. David Neumark, 1988. "Employers' Discriminatory Behavior and the Estimation of Wage Discrimination," Journal of Human Resources, University of Wisconsin Press, vol. 23(3), pages 279-295.
  5. Ronald Oaxaca, 1971. "Male-Female Wage Differentials in Urban Labor Markets," Working Papers 396, Princeton University, Department of Economics, Industrial Relations Section..
  6. 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.
  7. Yuriy Gorodnichenko & Klara Sabirianova Peter, 2004. "Returns to Schooling in Russia and Ukraine: A Semiparametric Approach to Cross-Country Comparative Analysis," William Davidson Institute Working Papers Series 719, William Davidson Institute at the University of Michigan.
  8. Andrew Tiffin, 2006. "Ukraine; The Cost of Weak Institutions," IMF Working Papers 06/167, International Monetary Fund.
  9. 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.
  10. 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.
  11. Ganguli, Ina & Terrell, Katherine, 2006. "Institutions, markets and men's and women's wage inequality: Evidence from Ukraine," Journal of Comparative Economics, Elsevier, vol. 34(2), pages 200-227, June.
  12. 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).
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