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Gender wage gap when women are highly inactive: Evidence from repeated imputations with Macedonian data

Author

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  • Petreski, Marjan
  • Mojsoska-Blazevski, Nikica
  • Petreski, Blagica
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.

Suggested Citation

  • Petreski, Marjan & Mojsoska-Blazevski, Nikica & Petreski, Blagica, 2014. "Gender wage gap when women are highly inactive: Evidence from repeated imputations with Macedonian data," MPRA Paper 57226, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:57226
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    Cited by:

    1. Duo Qin & Sophie van Huellen & Raghda Elshafie & Yimeng Liu & Thanos Moraitis, 2019. "A Principled Approach to Assessing Missing-Wage Induced Selection Bias," Working Papers 216, Department of Economics, SOAS University of London, UK.
    2. Luca Bettarelli & Michela Cella & Giovanna Iannantuoni & Elena Manzoni, 2021. "It’s a matter of confidence. Institutions, government stability and economic outcomes," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 38(2), pages 709-738, July.
    3. Marjan Petreski, 2020. "Beyond income inequality in North Macedonia: An overview," Finance Think Policy Studies 2020-04/27, Finance Think - Economic Research and Policy Institute.
    4. Petreski, Marjan. & Mojsoska-Blazevski, Nikica., 2015. "The gender and motherhood wage gap in the Former Yugoslav Republic of Macedonia : an econometric analysis," ILO Working Papers 994895293402676, International Labour Organization.
    5. Marjan Petreski & Nikica Mojsoska-Blazevski & Marcelo Bergolo, 2017. "Labor-Market Scars When Youth Unemployment is Extremely High: Evidence from Macedonia," Eastern European Economics, Taylor & Francis Journals, vol. 55(2), pages 168-196, March.
    6. Petreski, Blagica & Tumanoska, Despina, 2016. "Active labour market policies: Challenge for the Macedonian labour market," MPRA Paper 75879, University Library of Munich, Germany.
    7. Hasan Tekgüç & Değer Eryar & Dilek Cindoğlu, 2017. "Women’s Tertiary Education Masks the Gender Wage Gap in Turkey," Journal of Labor Research, Springer, vol. 38(3), pages 360-386, September.
    8. Marjan Petreski & Despina Tumanoska & Bojana Josifovska, 2019. "Good or bad tax? Assessing the early effects of the progressive and higher personal income tax in North Macedonia," Finance Think Policy Studies 2019-06/24, Finance Think - Economic Research and Policy Institute.
    9. Blagica Petreski & Pavle Gacov, 2018. "Sustainability of the pension system in Macedonia: A comprehensive analysis and reform proposal with MK-PENS – dynamic microsimulation model," Finance Think Policy Studies 2018-02/14, Finance Think - Economic Research and Policy Institute.

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    More about this item

    Keywords

    gender wage gap; gender participation gap; selection bias; repeated imputations;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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