Emerging ethnic wage gap: Estonia during political and economic transition

Leping, Kristian-Olari and Ott Toomet

Journal of Comparative Economics, 2008, vol. 36, issue 4, pages 599-619

Abstract: We analyse the ethnic wage gap in Estonia, a former Soviet republic and current EU member, which hosts a substantial Russian-speaking minority. The analysis covers a lengthy period from the final years of the Soviet Union until the first years of EU membership. We document the rise of a substantial wage gap among males in favour of the Estonian-speaking population. This result is robust with respect to controls for language skills, education, industry and occupation. The main factors causing the unexplained wage gap include different ethnicity-specific returns to education and working in the capital city. The gap for young and established workers is of equal size. We argue that the most plausible explanations are establishment-level segregation, possibly related to sorting and screening discrimination. Unobserved human capital, related to the segregated school system, may also play a certain role. Journal of Comparative Economics 36 (4) (2008) 599-619.

Keywords: Wage; decomposition; Ethnicity; Estonia; Former; Soviet; Union (search for similar items in EconPapers)
Date: 2008

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Persistent link: http://EconPapers.repec.org/RePEc:eee:jcecon:v:36:y:2008:i:4:p:599-619

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