«Women in transition: changes in gender wage differentials in Eastern Europe and the former Soviet Union» Elizabeth Brainerd Political Economy of Transition Lorena Canterini Sopio Gogsadze Liucija Zaksaite MA MIREES

Elizabeth Brainerd HARVARD UNIVERSITY Ph.D., Economics, November Fields: labor economics, public economics. DEPARTMENT OF ECONOMICS, BRANDEIS UNIVERSITY Susan and Barton Winokur Professor of Economics and Women’s and Gender Studies, present. Women in transition: changes in gender wage differentials in Eastern Europe and the former Soviet Union

Outline Conclusion Changes in female employment and labour force participation Decomposing the change in the female-male wage differential Empirical Results Factors Market reforms and changing labour market institutions in the early 1990s Under Socialism Introduction Women in transition: changes in gender wage differentials in Eastern Europe and the former Soviet Union

Introduction  How have women in formerly socialist countries been affected by the introduction of market reforms?  Is the introduction of market reforms in these countries a gender-neutral policy? Comparing surveys for each country before and after the initial period of reforms  1 or 2 years of market reforms Women in transition: changes in gender wage differentials in Eastern Europe and the former Soviet Union

Under Socialism Labour Market Institutions Soviet model Occupational wage scale Bonuses for plan fulfilment Unemployment was not recognised Limited mobility (  Internal passport) Excess demand for labour (  soft budget constraints and plan fulfilment) Economic Status of Women Rapid growth Intense industrialization 80% of female working- age population Relatively equal labour market outcomes for men and women BUT  double burden of market and non-market work Women in transition: changes in gender wage differentials in Eastern Europe and the former Soviet Union

Market Reforms and Changing Labor Market Institutions in the early 1990s  Different experiences according to countries  Wage-setting system change :  FSU: Decentralized plant-level negotiations  EECs: collective bargaining  Minimum Wage : (changes in the real value of the minimum wage will affect women’s wage more than men’s, as women have lower wages on average)  Russia and Ukraine: eroded by inflation  EECs: much higher Women in transition: changes in gender wage differentials in Eastern Europe and the former Soviet Union

Factors 1. Changes in the overall wage structure (e. g. skills) 2. Changes in gender- specific factors (e. g. discrimination) Return to education is favourable for women  increase female wages Employers facing hard budget constraints  women as high cost labour (maternity leaves and child care benefits) Women in transition: changes in gender wage differentials in Eastern Europe and the former Soviet Union

Empirical Results Women in transition: changes in gender wage differentials in Eastern Europe and the former Soviet Union

Decomposing the change in the female-male wage differential Observed X’s (i. e. level of education and years of work experience ) Observed prices Gap Unobserved prices 4 effects : Women in transition: changes in gender wage differentials in Eastern Europe and the former Soviet Union Substantial differences between Russia and Ukraine and EECs

Changes in female employment and labour force participation  Shift in the occupational and industrial distribution of employment (« man-power » index)  Demand and supply shifts  Labour market discrimination (hypotesis):  EECs: discrimination eroded by the forces of competition  Russia and Ukraine: women may benefit from continued de-monopolization and liberalization of those economies Women in transition: changes in gender wage differentials in Eastern Europe and the former Soviet Union

Conclusion EECs : Beneficia l in comparison with men Facing less labour market discrimination Russia and Ukraine: Increase in inequality Lack of an effective minimum wage In both groups of countries, market reforms have benefited women in many ways outside the labour market (i. e. availability of goods and services). Women in transition: changes in gender wage differentials in Eastern Europe and the former Soviet Union