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Journal of Labor Research

, Volume 35, Issue 4, pp 393–411 | Cite as

Gender Wage Gap when Women are Highly Inactive: Evidence from Repeated Imputations with Macedonian Data

  • Marjan PetreskiEmail author
  • Nikica Mojsoska Blazevski
  • Blagica Petreski
Article

Abstract

The objective of this research is to understand if large gender employment and participation gaps in Macedonia can shed some light on the gender wage gap. A large contingent of inactive women in Macedonia including long-term unemployed due to the transition process, female remittance receivers from the male migrant, unpaid family workers in agriculture and so on, is outside employment, but is not necessarily having the worst labour-market characteristics. In addition, both gender wage gap and participation gap enlarge as education decreases, revealing the importance of non-random selection of women into employment. Though, the standard Heckman-type correction of the selectivity bias suggests that non-random selection exists, but the resulting wage gap remains at the same level even when selection has been considered. Instead, we perform repeated wage imputations for those not in work, by simply making assumptions on the position of the imputed wage observation with respect to the median. Then, we assess the impact of selection into employment by comparing estimated wage gaps on the base sample versus on an imputed sample. The main result is that selection explains most of the gender wage gap in the primary-education group (75 %), followed by the secondary-education group (55 %). In the tertiary group, the small initial gap vanishes once selection considered. This suggests that indeed non-working women are not those with the worst labour-market characteristics. Results suggest that gender wage discrimination in Macedonia is actually between 5.4 and 9.8 % and does not exist for the highly-educated women. The inability of the Heckman-type correction to document a role for selection in explaining the gender wage gap may be due to the criticisms to the exclusion restrictions and the large amount of missing wages.

Keywords

Gender wage gap Gender participation gap Selection bias repeated imputations 

JEL classification

J16 J31 E24 

Notes

Acknowledgments

This research has been generously supported by the Global Development Network and the Government of Japan within the Japanese Award for Outstanding Research on Development 2013. The authors thank for the guidance and useful comments of Vladimir Gligorov and the hosts of the Institute for East and Southeast European Studies, Regensburg, Germany, during Marjan Petreski’s stay, 15.1-1.2.2014. All remaining errors are solely the authors’.

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Copyright information

© Springer Science+Business Media New York 2014

Authors and Affiliations

  • Marjan Petreski
    • 1
    Email author
  • Nikica Mojsoska Blazevski
    • 2
  • Blagica Petreski
    • 3
  1. 1.School of Business Economics and ManagementUniversity American College Skopje, CERGE-EI Career Integration FellowPragueCzech Republic
  2. 2.School of Business Economics and ManagementUniversity American College SkopjeSkopjeRepublic of Macedonia
  3. 3.Association for Economic Research, Advocacy and Policymaking“Finance Think”SkopjeRepublic of Macedonia

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