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Wage determination and gender discrimination in a transition economy : the case of Romania

  • Paternostro, Stefano
  • Sahn, David E.

The authors analyze wage determination and gender discrimination in Romania using the 1994 Romanian Household survey. They estimate wages for men and women in urban and rural areas using a Heckman selection model. They analyze gender discrimination in offered wages, to address the methodological shortcomings found in the literature. Increasing returns to education and experience are consistently significant for both men and women in urban and rural areas. Returns to education are greater in rural than in urban areas, especially for women. Labor markets are segmented regionally, probably as a result of the country's economic history, especially the spatial allocation of resources under a centrally planned economy. Only with economic liberalization has the specialization of specific regions translated into differences in regional performance and hence local economic differences. They found discrimination against women in both urban and rural labor markets, especially at low levels of education. The observed bias against women in urban areas is comparable to that found in other Western countries--but in the region's rural settings the bias is much greater than in the West. With the adjustment to market forces, as less-skilled workers face increasing difficulties in the region, women's relative wages may be expected to decline further. Discrepancy in pay also directly affects the level of pensions, unemployment benefits, and other means-tested benefits to workers, contributing to pauperization.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2113.

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Date of creation: 31 May 1999
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Handle: RePEc:wbk:wbrwps:2113
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  1. Ronald Oaxaca, 1971. "Male-Female Wage Differentials in Urban Labor Markets," Working Papers 396, Princeton University, Department of Economics, Industrial Relations Section..
  2. Blau, Francine D & Kahn, Lawrence M, 1992. "The Gender Earnings Gap: Learning from International Comparisons," American Economic Review, American Economic Association, vol. 82(2), pages 533-38, May.
  3. David Neumark, 1987. "Employers' discriminatory behavior and the estimation of wage discrimination," Special Studies Papers 227, Board of Governors of the Federal Reserve System (U.S.).
  4. Dimitri G. Demekas & Mohsin S. Khan, 1991. "The Romanian Economic Reform Program," IMF Working Papers 91/80, International Monetary Fund.
  5. Orazem, Peter & Vodopivec, Milan, 1995. "Winners and Losers in Transition: Returns to Education, Experience, and Gender in Slovenia," Staff General Research Papers 5270, Iowa State University, Department of Economics.
  6. Oaxaca, Ronald L. & Ransom, Michael R., 1994. "On discrimination and the decomposition of wage differentials," Journal of Econometrics, Elsevier, vol. 61(1), pages 5-21, March.
  7. Simon Appleton & John Hoddinott & Pramila Krishnan, 1996. "The gender wage gap in three African countries," CSAE Working Paper Series 1996-07, Centre for the Study of African Economies, University of Oxford.
  8. Orazem, Peter F. & Vodopivec, Milan, 1999. "Male-female differences in labor market outcomes during the early transition to market : the case of Estonia and Slovenia," Policy Research Working Paper Series 2087, The World Bank.
  9. Halvorsen, Robert & Palmquist, Raymond, 1980. "The Interpretation of Dummy Variables in Semilogarithmic Equations," American Economic Review, American Economic Association, vol. 70(3), pages 474-75, June.
  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. Sahn, David E. & Alderman, Harold, 1988. "The effects of human capital on wages, and the determinants of labor supply in a developing country," Journal of Development Economics, Elsevier, vol. 29(2), pages 157-183, September.
  12. Earle, John S. & Pauna, Catalin, 1996. "Incidence and duration of unemployment in Romania," European Economic Review, Elsevier, vol. 40(3-5), pages 829-837, April.
  13. repec:cup:cbooks:9780521433297 is not listed on IDEAS
  14. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-61, January.
  15. Bardhan, Pranab K, 1979. "Wages and Unemployment in a Poor Agrarian Economy: A Theoretical and Empirical Analysis," Journal of Political Economy, University of Chicago Press, vol. 87(3), pages 479-500, June.
  16. Cotton, Jeremiah, 1988. "On the Decomposition of Wage Differentials," The Review of Economics and Statistics, MIT Press, vol. 70(2), pages 236-43, May.
  17. Reimers, Cordelia W, 1983. "Labor Market Discrimination against Hispanic and Black Men," The Review of Economics and Statistics, MIT Press, vol. 65(4), pages 570-79, November.
  18. Glick, Peter & Sahn, David E, 1997. "Gender and Education Impacts on Employment and Earnings in West Africa: Evidence from Guinea," Economic Development and Cultural Change, University of Chicago Press, vol. 45(4), pages 793-823, July.
  19. repec:cup:cbooks:9780521438827 is not listed on IDEAS
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