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Can the introduction of a minimum wage in FYR Macedonia decrease the gender wage gap?

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  • Angel-Urdinola, Diego F.

Abstract

This paper relies on simple framework to understand the gender wage gap in Macedonia and then simulates how the gender wage gap would behave after the introduction of a minimum wage. First, it presents a new albeit simple decomposition of the wage gap into three factors: (i) a wage level factor, that measures the extent to which the gender gap is driven by differences in wage levels among low-skilled workers of oppositesex; (ii) an skills endowment factor, that quantifies the extent to which the gender wage gap is driven because the share of high-skilled workers differs by gender; and (iii) returns to education factor, that measures the extent to which the gender gap exists is driven by differences by gender in returns to education. Second, the paper presents simple set of simulations that indicate that the introduction of a minimum wage in Macedonia can contribute to decrease the gender wage gap by up to 23 percent. Nevertheless, in order to get a significant improvement in the wage gap a rather high minimum wage may required, which may contribute to reductions in employment.

Suggested Citation

  • Angel-Urdinola, Diego F., 2008. "Can the introduction of a minimum wage in FYR Macedonia decrease the gender wage gap?," Social Protection and Labor Policy and Technical Notes 46851, The World Bank.
  • Handle: RePEc:wbk:hdnspu:46851
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    References listed on IDEAS

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    1. Charles Brown & Curtis Gilroy & Andrew Kohen, 1982. "The Effect of the Minimum Wage on Employment and Unemployment: A Survey," NBER Working Papers 0846, National Bureau of Economic Research, Inc.
    2. Diego Angel-Urdinola, 2008. "Can a minimum wage increase have an adverse impact on inequality? Evidence from two Latin American economies," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 6(1), pages 57-71, March.
    3. Stephen Machin & Alan Manning, 1992. "Minimum Wages," CEP Discussion Papers dp0080, Centre for Economic Performance, LSE.
    4. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
    5. Brown, Charles & Gilroy, Curtis & Kohen, Andrew, 1982. "The Effect of the Minimum Wage on Employment and Unemployment," Journal of Economic Literature, American Economic Association, vol. 20(2), pages 487-528, June.
    6. Kaas, Leo & Madden, Paul, 2008. "Holdup in oligopsonistic labour markets - a new role for the minimum wage," Labour Economics, Elsevier, vol. 15(3), pages 334-349, June.
    7. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
    8. Daniel Aaronson & Eric French & James MacDonald, 2008. "The Minimum Wage, Restaurant Prices, and Labor Market Structure," Journal of Human Resources, University of Wisconsin Press, vol. 43(3), pages 688-720.
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    Citations

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    Cited by:

    1. Piggott, John & Sane, Renuka, 2009. "Indexing pensions," Social Protection and Labor Policy and Technical Notes 52445, The World Bank.
    2. Milan Vodopivec & Lilijana Madjar & Primoz Dolenc, 2009. "Non-performance of the Severance Pay Program in Slovenia," Financial Theory and Practice, Institute of Public Finance, vol. 33(1), pages 89-102.
    3. Woo, Kye Lee, 2009. "Productivity increases in SMEs : with special emphasis on in-service training of workers in Korea," Social Protection and Labor Policy and Technical Notes 51251, The World Bank.
    4. Woolford, Geoff, 2009. "Social protection for migrants from the Pacific Islands in Australia and New Zealand," Social Protection and Labor Policy and Technical Notes 49174, The World Bank.
    5. Ferrer, Ana M. & Riddell, W. Craig, 2009. "Unemployment insurance savings accounts in Latin America : overview and assessment," Social Protection and Labor Policy and Technical Notes 49173, The World Bank.
    6. repec:eee:ecmode:v:70:y:2018:i:c:p:174-185 is not listed on IDEAS
    7. Milan Vodopivec, 2013. "Introducing unemployment insurance to developing countries," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-23, December.
    8. Holzmann, Robert, 2010. "Bringing Financial Literacy and Education to Low and Middle Income Countries: The Need to Review, Adjust, and Extend Current Wisdom," IZA Discussion Papers 5114, Institute for the Study of Labor (IZA).
    9. James, Estelle, 2009. "Rethinking survivor benefits," Social Protection and Labor Policy and Technical Notes 52919, The World Bank.
    10. Chae, ChangKyun & Chung, Jaeho, 2009. "Pre-employment vocational education and training in Korea," Social Protection and Labor Policy and Technical Notes 52186, The World Bank.
    11. Makhema, Mpho, 2009. "Social protection for refugees and asylum seekers in the Southern Africa Development Community (SADC)," Social Protection and Labor Policy and Technical Notes 49168, The World Bank.
    12. Marjan Petreski & Nikica Blazevski & Blagica Petreski, 2014. "Gender Wage Gap when Women are Highly Inactive: Evidence from Repeated Imputations with Macedonian Data," Journal of Labor Research, Springer, vol. 35(4), pages 393-411, December.
    13. Avato, Johanna & Koettl, Johannes & Sabates-Wheeler, Rachel, 2009. "Definitions, good practices, and global estimates on the status of social protection for international migrants," Social Protection and Labor Policy and Technical Notes 49172, The World Bank.
    14. Lord, Janet & Posarac, Aleksandra & Nicoli, Marco & Peffley, Karen & Mcclain-Nhlapo, Charlotte & Keogh, Mary, 2010. "Disability and international cooperation and development : a review of policies and practices," Social Protection and Labor Policy and Technical Notes 56092, The World Bank.
    15. Ra, Young-Sun & Shim, Kyung Woo, 2009. "The Korean case study : past experience and new trends in training policies," Social Protection and Labor Policy and Technical Notes 53696, The World Bank.
    16. Kuddo, Arvo, 2009. "Structural educational reform : evidence from a teacher's displacement program in Armenia," Social Protection and Labor Policy and Technical Notes 47164, The World Bank.
    17. Koettl, Johannes, 2009. "Human trafficking, modern day slavery, and economic exploitation," Social Protection and Labor Policy and Technical Notes 49802, The World Bank.

    More about this item

    Keywords

    Labor Markets; Gender and Development; Labor Policies; Access to Finance;

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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