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The Gender Wage Gap in Bulgaria: A Semiparametric Estimation of Discrimination

  • Dean Jolliffe

Bulgaria's transition to a market economy has coincided with a large increase in wage inequality. Given the emphasis on wage leveling in pre-transition Bulgaria, the rise in wage inequality may be due to managers rewarding more productive workers; or it may be the result of rewarding non-economic characteristics such as gender. Using data from the 1995, nationally representative Bulgaria Integrated Household Survey, I examine whether gender discrimination is an important factor determining the gap in wages between men and women and the extent to which gender discrimination affects wage inequality. I model wage determination with a correction for sample selection as a Type III Tobit and estimate this model with the Honoré et al. (1997) semiparametric estimator. Unlike the classic Heckman correction for sample selection, this estimator is consistent in the presence of heteroscedasticity. I bootstrap to estimate standard errors. Using separate wage regression estimates for men and women, an Oaxaca decomposition indicates that women's wages are 25 percent lower than men's wages and 85 percent of this differential is due to discrimination, or more precisely, due to differences in how men and women are rewarded for the same characteristics.

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Paper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number 401.

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Length: pages
Date of creation: 01 Jul 2001
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Handle: RePEc:wdi:papers:2001-401
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  1. Milan Vodopivec & Peter F. Orazem, 2000. "Male-female differences in labor market outcomes during the early transition to market: The cases of Estonia and Slovenia," Journal of Population Economics, Springer, vol. 13(2), pages 283-303.
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  8. 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.
  9. Hurd, Michael, 1979. "Estimation in truncated samples when there is heteroscedasticity," Journal of Econometrics, Elsevier, vol. 11(2-3), pages 247-258.
  10. 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.
  11. Pagan, Adrian & Vella, Frank, 1989. "Diagnostic Tests for Models Based on Individual Data: A Survey," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 4(S), pages S29-59, Supplemen.
  12. 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.
  13. Christopher Ferrall, 1998. "Routines to maximize a function," Stata Technical Bulletin, StataCorp LP, vol. 7(38).
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  15. Heckman, James J, 1974. "Shadow Prices, Market Wages, and Labor Supply," Econometrica, Econometric Society, vol. 42(4), pages 679-94, July.
  16. Honore, Bo E. & Kyriazidou, Ekaterini & Udry, Christopher, 1997. "Estimation of Type 3 Tobit models using symmetric trimming and pairwise comparisons," Journal of Econometrics, Elsevier, vol. 76(1-2), pages 107-128.
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