This article is part of the IZA project ‘The Economics and Persistence of Migrant Ethnicity’ funded by the Volkswagen Foundation. We thank Hartmut Lehmann, Ronald Oaxaca, Katherine Terrell, Stephen Trejo, participants of the 2007 conference of the European Society of Population Economics (ESPE) in Chicago and the 2008 Association for Economic Studies (ACES) Meeting in New Orleans for helpful comments and suggestions; and Olga Kupets, Norberto Pignatti and Volodymyr Vakhitov for helping us with various data issues. We especially thank two anonymous referees and the editor for their valuable and thoughtful suggestions that resulted in an improved manuscript. This paper is a revised version of IZA discussion paper no. 2330.
The Russian–Ukrainian earnings divide1
Article first published online: 19 OCT 2011
© 2011 The Authors. Economics of Transition © 2011 The European Bank for Reconstruction and Development
Economics of Transition
Volume 20, Issue 1, pages 1–35, January 2012
How to Cite
Constant, A. F., Kahanec, M. and Zimmermann, K. F. (2012), The Russian–Ukrainian earnings divide. Economics of Transition, 20: 1–35. doi: 10.1111/j.1468-0351.2011.00428.x
- Issue published online: 14 DEC 2011
- Article first published online: 19 OCT 2011
- Received: December 24, 2006; Acceptance: February 19, 2011
- earnings differences;
- transitional labour markets;
- ethnic premium
Ethnic differences are often considered to be powerful sources of diverse economic behaviour. In this article, we investigate to what extent ethnicity affects Ukrainian labour market outcomes. Using microdata from the Ukrainian Longitudinal Monitoring Survey and the Oaxaca–Blinder decomposition of earnings, we find a persistent and increasing labour market divide between ethnic Russians and Ukrainians throughout Ukraine’s transition era. We establish that language, rather than nationality, is the key factor behind this ethnic premium favouring Russians. Our findings further document that this premium is larger amongst males than females.