1. GENDER PAY GAP IN THE WESTERN BALKAN COUNTRIES: EVIDENCE FROM SERBIA, MONTENEGRO AND MACEDONIA Sonja Avlijaš Belgrade, 22 February 2013

2. Presentation outline  Employment trends  Unadjusted vs. adjusted wage gap  Composition of the adjusted (true) wage gap  Public vs. private sector trends  Glass ceiling effect

3. Employment gaps  In all three countries female employment rates were significantly lower than male during the analysed period.  These employment gaps are mainly caused by higher female inactivity.

4. Employment gaps by education  In all three countries gender employment gap shrinks with educational attainment.

5. Type of employment  Women in all three countries are more often found in wage employment than men, but they are still a minority in total wage employment.  Women can at least half as frequently be found working as self-employed in all three countries.  In Serbia and Macedonia they are found to work more than twice as frequently as unpaid family members, while in Montenegro there is no gender gap in this respect.

6. Unadjusted and adjusted gender wage gaps

7. Explained part of the gap (1)  Unlike in the Western economies, differences in labour market characteristics between men and women cannot explain the gender wage gap in the Western Balkans.  In Serbia and Macedonia these differences in characteristics hide the true magnitude of the gap, because employed women on average have better characteristics than employed men.  In both Serbia and Macedonia, this female advantage is split between their better education and better occupational characteristics  Women in Serbia and Macedonia “use” their better personal labour market characteristics to obtain jobs in the more highly paid occupations and sectors.

8. Explained part of the gap (2)  In Montenegro, a different trend is observed.  When we control for gender differences in education and work experience with the same employer (tenure), the estimated gender pay gap amounts to 19.2%.  However when we add occupation, sector of activity and region, the gender pay gap declines to 16.1% in favour of men.  Therefore, women in Montenegro do not, or are not at all able to, “use” these characteristics in order to access the better paid occupations and sectors of the economy.

9. The true wage gap  In all three countries the adjusted gap is better explained by differences in unobservable characteristics than by differences in returns to observable labour market characteristics.  In Serbia the entire adjusted gap exists is due differences in unobservable characteristics.  In Macedonia, the largest share of the true wage gap – 69% (12.5pp of 17.9%) stems from unobservable characteristics of workers.  In Montenegro 75% of the true gender wage gap (12pp of 16.1%) cannot be accounted for by different returns to the same labour market characteristics between the genders.

10. Public vs. private sector – unadjusted vs. adjusted gap

12. Public sector – differences in returns  In Serbia women have higher returns to the same characteristics than men in the public sector, but male unobservable characteristics are better awarded than female.  In Macedonia, women have almost equal returns to characteristics as men in the public sector, but we observe higher male returns to unobservable characteristics (10.6 of 11.4% gap).  In Montenegro the true gap is better explained by differences to returns, which account for 68% of the gap (7pp out of 11.8%).  There is a clear glass ceiling effect in the public sector in Macedonia (7%) and Montenegro (15%), but not in Serbia.

13. Private sector – differences in returns  In Serbia, differences in returns can account for 42% of the adjusted gap.  In Macedonia, the largest part of the adjusted gap in the private sector exists due to differences in unobservable characteristics, which account for 80% of the adjusted pay gap in the private sector (14.7pp out of 18.5%).  In Montenegro, the true wage gap is better explained by differences in unobservable characteristics, which make 64% of the gap (11.2pp out of 17.4%).  While we observe a modest glass ceiling effect in the private sector in Serbia and a very strong one in Montenegro (28%), evidence from Macedonia does not point to its existence.

14. Questions? Thank you for your attention!