The Russian–Ukrainian Earnings Divide
Institute for the Study of Labor (IZA); DIW DC
Institute for the Study of Labor (IZA); Central European University; Central European Labour Studies Institute
Klaus F. Zimmermann
Institute for the Study of Labor (IZA); German Institute for Economic Research (DIW Berlin); University of Bonn; Journal of Population Economics; Centre for Economic Policy Research (CEPR)
Economics of Transition, Vol. 20, Issue 1, pp. 1-35, 2012
Ethnic differences are often considered to be powerful sources of diverse economic behaviour. In this article, we investigate to what extent ethnicity affects Ukrainian labour market outcomes. Using microdata from the Ukrainian Longitudinal Monitoring Survey and the Oaxaca–Blinder decomposition of earnings, we find a persistent and increasing labour 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 favouring Russians. Our findings further document that this premium is larger amongst males than females.
Number of Pages in PDF File: 35
Keywords: Ethnicity, earnings differences, discrimination, transitional labour markets, ethnic premium
JEL Classification: J15, J70, J82Accepted Paper Series
Date posted: December 16, 2011
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