Male-female differences in labor market outcomes during the early transition to market: The cases of Estonia and Slovenia

Abstract

Estonia adopted liberal labor market policies during the transition, and Slovenia took an interventionist approach. Even so, relative wages for women rose in both countries. Women were less mobile across jobs in both countries, so men disproportionately filled new jobs in expanding sectors. Orazem and Vodopivec analyze changes in women's relative wages, using social security data from Slovenia (1987-92) and a retrospective survey of Estonia's labor force (1989-94). Estonia adopted liberal labor market policies. Slovenia took an interventionist approach. Nevertheless, relative wages for women rose in both countries. Actually, real wages fell for both men and women, but women lost less than men did. Certain factors favored women: Returns to human capital rose during the transition. Relative labor demand shifted toward predominantly female sectors (health, education, financial services, retail trade) and away from traditionally male sectors (agriculture, manufacturing, mining, transportation). Women with low wages had a disproportionate incentive to exit the labor market, especially in Estonia. Women were less mobile across jobs in both countries, however, so men disproportionately filled new jobs in expanding sectors. Women who remained employed had higher average education levels. Women's relative immobility will tend to reduce their early relative gains. Their relative wages will also continue to fall if their share of the expanding sectors continues to fall. This paper - a product of Poverty and Human Resources, Development Research Group - is part of a larger effort in the group to investigate gender outcomes in transition economies. The study was funded by the Bank`s Research Support Budget under research project Labor Market Adjustment in Estonia (RPO 679-71).