Working Papers, Swedish Business School, Örebro University
No 2010:1:
"In every rank, or great or small, ’Tis industry supports us all": Romanians and ethnic Hungarians, and their wages, in transition
Daniela Andrén ()
Abstract: Legally binding treaties or memorandums have been used
over time to regulate the issue of national borders of many European
countries. As a result, relatively large groups of people have become
ethnic minorities in other countries. They may conserve their ethnic
identities, and therefore their children may accumulate ethnic human
capital (e.g., language, culture, and religion) in addition to the general
human capital of the country. Therefore, they can get access to an
appropriate occupation linked by tradition or other factors to their ethnic
group. This paper uses estimates from a selection model with an endogenous
switch among three broad types of occupational groups to analyze the
composition of the wage gap between Romanians and ethnic Hungarians in
Romania before and during the transition from a planned to a market
economy. The results suggest that the institutional settings of the
controlled economy allowed Romanians to work in occupations that gave them
the best returns, while the changes during the transition years allowed
ethnic Hungarians to work in occupations that gave them the best
returns.
Keywords: ethnic wage gap; occupation; selection model with an endogenous switch; wage gap decomposition; (follow links to similar papers)
JEL-Codes: J31; J38; J39; J71; P27; (follow links to similar papers)
54 pages, January 15, 2010
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