Abstract
Very little is known about gender wage disparities in Kosovo and, to date, nothing is known about how such wage disparities evolve over time, particularly during the first few years spent by young workers in the labor market. More generally, not much is known about gender wage gaps in early career worldwide, a period which is perceived to be an important determinant of the overall gender wage disparity. This paper analyzes data from the School-to-Work Transition (SWT) survey, an unusual survey conducted by the ILO between 2004 and 2006 in eight countries, including Kosovo, that documents the labor market experiences of the youngest age segment in the labor force (age 15–25 years). The results of the analysis suggest that, on average, women have lower education attainment than men but this educational disparity is masked among the sample of employed men and women who tend to be well-educated. The consequences of this dramatic segmentation of labor market participation are striking. On average, there is little or no gender wage gap. The results of the Juhn et al. (1993) decomposition analysis reveals that gender wage differences are almost entirely driven by differences in characteristics (rather than either the returns to those characteristics or the residual). The greater average educational attainment of employed women, among other characteristics, tends to fully offset the gender wage gap. Not surprisingly, the returns to women's education among employed women are low because there is little variation in educational attainment among the sample of well-educated employed women. When the analysis controls for sample selection bias and heterogeneity, the returns to women's education rise, confirming the lower productivity-related characteristics of non-employed women compared to employed women. The relatively small sample constrains a fuller analysis of the emergence of the gender wage gap, which, according to a small but growing international literature, typically materializes during childbearing years.
Highlights
In the Western Balkans region, Kosovo has been hit hard by various shocks over the last two decades
In Kosovo and in many other countries more generally, little is known about the evolution of gender differences in wages over the life cycle
This paper uses an unusual database, the School-to-Work Transition (SWT) survey conducted by the ILO in Kosovo in 2004, to shed light on gender wage differentials
Summary
In the Western Balkans region, Kosovo has been hit hard by various shocks over the last two decades. Existing studies of gender differences in Kosovo have noted that in contrast to gender disparities in other developing countries, the women in Kosovo are at a disadvantage compared to men both in terms of their educational attainment and their employment prospects. It is not clear how this affects gender differences in earnings, as available databases to date typically do not provide information on wages in Kosovo. In Kosovo and in many other countries more generally, little is known about the evolution of gender differences in wages (as well as in labor supply) over the life cycle. An understanding of the first few years in the labor market is important because it is likely that the wage growth during this period is “the primary cause of the overall gender pay gap,” as has been argued recently
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