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Croatian Wage Inequality and Wage Differentials, 1970-2008: Measurement and Determinants

Author

Listed:
  • Ivo Bicanic

    (Department of Economics,University of Zagreb)

  • Saul D. Hoffman

    (Department of Economics, University of Delaware)

  • Oriana Vukoja

    (Department of Economics,University of Zagreb)

Abstract
We use newly-available data on income by educational and vocational attainment and grouped income-interval data to examine wage inequality and wage differentials in Croatia between 1970 and 2008. This is a time period during which Croatia experienced enormous institutional and structural change, including the fall of socialism, hyperinflation, the Homeland war and the creation of sovereign Croatia. We construct both Gini and Theil measures of inequality, using grouped data. We find a general compression of earnings differences by educational and vocational attainment, but with a slight increase in the capitalist period post-1990. The income interval data shows a clearer pattern of a secular increase in inequality that is sharper in the capitalist period. We also examine within-industry inequality to see whether industries that experienced stronger structural changes also experienced a greater increase in inequality. Our evidence on this is mixed.

Suggested Citation

  • Ivo Bicanic & Saul D. Hoffman & Oriana Vukoja, 2010. "Croatian Wage Inequality and Wage Differentials, 1970-2008: Measurement and Determinants," Working Papers 10-03, University of Delaware, Department of Economics.
    • Handle: RePEc:dlw:wpaper:10-03.
    as

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    File URL: http://graduate.lerner.udel.edu/sites/default/files/ECON/PDFs/RePEc/dlw/WorkingPapers/2010/UDWP2010-03.pdf
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    References listed on IDEAS

    as
    1. Martin Wagner & Jaroslava Hlouskova, 2005. "CEEC growth projections: Certainly necessary and necessarily uncertain," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 13(2), pages 341-372, April.
    2. Katarina Ott, 2002. "The Underground Economy in Croatia," Occasional paper series 12, Institute of Public Finance.
    3. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-442, June.
    4. International Monetary Fund, 2007. "Republic of Croatia: Selected Issues," IMF Staff Country Reports 2007/082, International Monetary Fund.
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    Cited by:

    1. Mitja Čok & Ivica Urban & Miroslav Verbič, 2013. "Income Redistribution through Taxes and Social Benefits: The Case of Slovenia and Croatia," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 60(5), pages 667-686.

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    More about this item

    Keywords

    Croatia; Transition Economy Labor Markets; Inequality; Gini coefficient; Theil Index;
    All these keywords.

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • P2 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies
    • P23 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Factor and Product Markets; Industry Studies; Population
    • P34 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Finance

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