Index adjusted wage gap, 9, 176, 198, 202 206, 224 227, 230 233, 235 238, 241n19 Albania, 44, 54, 287, 288, 289 Atkinson index, 266, 277, 281, 281n1 Baltic Countries (BCs), 1, 3 6, 8, 10, 11, 13, 27, 29, 30, 41, 42, 47, 54, 94, 119 121, 123, 127, 132, 135, 144, 148, 173, 198, 285, 302 Belarus, 19, 254, 289, 290, 301, 302 Blinder Oaxaca (B O) decomposition technique, 148 151, 154 164, 222, 226 228 Bosnia, 19, 65, 66, 254 Bulgaria, 5, 19, 20, 44, 46, 53, 65, 66, 70, 95, 98, 125, 132, 151, 156, 176, 199, 205, 209, 258 259, 272, 273, 276, 277, 278, 287, 293 business freedom, 4, 61, 70, 73, 78 80, 81, 85 87 capital assets, 74, 75, 80, 85, 89n3 capital income, 13, 16 capital intensity, 67 68, 73, 74, 75, 78 capital labour substitution, 4, 60, 75, 87 capital output ratio, 61, 68, 73, 75, 76, 87 capitalism, 13, 28, 63, 176, 199, 209 models of, 29, 120 patrimonial, 13 post-socialist, 302 Central and Eastern European Countries (CEECs), 4, 5, 8, 10, 13, 20, 23, 29, 30, 41, 42, 65, 94, 119 121, 123, 127, 135, 144, 148, 173, 198, 285, 290, 298, 302 Commonwealth Independent States (CIS), 11, 284 285, 287, 290, 298, 299, 301, 302 Competition Policy (CP),4, 16, 42 43, 44, 52 55 constitutions/constitution, 2, 9 of Bulgaria, 253, 258 259 of CEECs and BCs, 254 individualisation as a trend of, 249 250 of Lithuania, 253, 259 260 modern European, 247 248, 250 of Poland, 253, 254 256 of Romania, 253, 256 258 post-world War II, 47, 251 and social rights, 260 262 and taxation norms, 252 254 UK, 253 coordinated market economies (CMEs), 28 credit market freedom/credit freedom, 61, 70 73, 78 80, 85, 86 Czech Republic, 21, 25, 29, 53, 61, 62, 64, 65, 80, 86, 89n6, 89n7, 95, 98, 127, 151, 154, 176, 199, 204, 206, 209, 215, 254, 275, 289, 291, 292, 294, 297 Economic Freedom World (EFW) database, 175, 208, 240n18 education composition, 105 107 education groups data for empirical analysis of, 174 176, 195n1 and descriptive evidence of income inequality, 176 179 and econometric analysis of income inequality, 179 182 effect of deregulation on, 185, 188 hourly wage inequality within, 176 177, 190 hourly wages in pooled sample and primary educated workers, 182 184, 190 191 hourly wages in secondary and tertiary educated workers, 185 187, 192 93 307
308 Index education groups continued and labour market institutional settings, 171 174, 185 187 median hourly wage by, 176 177 Theil index decomposition of hourly wage inequality by, 178 179, 194 and union density of workers, 185, 188 and wage coordination, 187 188 and workers employment status, 184 189 education mismatch index, 95 96, 106 107 emigrants, 5, 95, 98, 100, 103, 105, 113, 114n3 emigration, 93 95, 114n2 crude rate of, 98 100, 108 110 and education composition of employment and population, 105 107 and employment rates by education in NEUMs, 102 105 and employment rates in NEUMs, 100 103 in NEUMs, 96 100 and wage inequality, 103 113 see also emigration effects on wage inequality emigration effects on wage inequality crude rate of emigration and wage inequality, 108 110 data sources and variables of study, 95 96 and education composition of employment and population, 105 107 hourly wages inequality in primary educated workers, 111 112 hourly wages inequality within and between education groups, 112 overall hourly wages inequality, 107 108 real hourly wages by educational attainment, 108, 110 111 employment, see employment protection legislation (EPL); employment rates; permanent employment; temporary employment employment protection legislation (EPL), 26, 27, 146, 151, 167n2, 172, 207 employment rates, 5, 62, 95 and education, 102 105 and education composition of employment and population, 105 107 emigration and, 96 102, 106, 113, 115 female, 102, 294, 297 and wage inequality, 103, 105 for women with/without children, 294, 297 equal absolute sacrifice principle, 267, 268 error correction mechanism (ECM), 4, 74, 76, 79, 80, 81 Estonia, 5, 19, 44, 53, 95, 106, 110, 113, 151, 154, 155, 176, 200, 204, 206, 209, 215, 254, 294 EU-15 Western countries, 22 23, 60, 63, 65 69, 72 73, 93, 98 99, 102, 106, 113, 173 EUKLEMS database, 61, 80 European Bank for Reconstruction and Development (EBRD), 21, 42 transition/reform indicators, 42 46, 49, 52, see also transition refoms European constitutions, 9, 247 248, 249 250, 257 European Court of Human Rights (ECHR), 248, 250 252, 253, 258, 259 European legal systems, 9, 28, 29, 247, 248, 250 252, 256 European legal traditions, 247 solidarity principle in, 248 249, 250, 252 spillover effects of, 250 252 European Union (EU) citizenship, 260 262 and constitutional norms on taxation, 252 254 and constitutional social rights, 260 262 Court of Justice, 250, 251, 260, 262
Index 309 European Convention of Human Rights, 251 legal framework, 9, 28, 29, 247, 248, 250 252, 256 membership, 9, 252, 253, 254 see also European constitutions; European Court of Human Rights (ECHR); European legal traditions; European Union Statistics on Income and Living Conditions (EU-SILC) European Union Statistics on Income and Living Conditions (EU-SILC), 5, 7, 10, 95, 96, 114n4, 120, 121, 123, 124, 129, 133, 137, 140n3, 151, 167n4, 167n5, 174, 179, 181, 198, 200, 202, 270 271, 279 Eurostat, 48, 95, 100, 114n5, 125, 162, 167n6, 273, 275, 276 former Soviet Union countries (FSU), 12, 13, 26, 27, 30, 41, 42, 47, 55 Formerly Planned Economies, 9, 12, 14, 21, 29, 41, 63, 70, 93, 125, 126, 127, 247, 273 functional income distribution, 14 16, 21 22, 43, 59 88 passim see also labour shares gender earnings inequality in NEUMs, 198 adjusted gender earnings gap, 202 206 adjusted gender earnings gap by quantiles, 204 205 historical perspective of, 199 200 hourly earnings by employment status, 203 impact of labour market institutions on, 208 214, 215 216 job characteristics and, 213 214 labour market institutions relevance in, 206 208 male/female hourly earnings, 201 202 microdata source on, 200 raw earnings gaps, 200 202 gender wage gap (GWG), 9, 27, 198 200, 205 208, 239n1 labour market institutions and, 231 232 in transition, 225 226 unadjusted and adjusted, 229 231, 232 233 and wage decomposition, 224 225 within public and private sectors, 232 237 see also gender earnings inequality in NEUMs; gender wage inequality in Western Balkans gender wage inequality in Western Balkans, 222 224, 237 239 BO decomposition data on wage gap, 229 230 BO decomposition in the public and private sector, 234 236 data description of, 228 differences in returns versus unobserved heterogeneity, 230 231, 236 237 gender wage gap in transition, 225 226 gender wage gap and wage decomposition, 224 225 labour market institutions and gender wage gaps, 231 232 methodology of study on, 226 228 and role of labour market regulation, 237 238 unadjusted and adjusted wage gaps in males, 229 unadjusted and adjusted wage gaps within public and private sectors, 232 233 unadjusted wage gap and labour market deregulation, 231 Germany, 21, 120, 123, 151, 154, 162, 163, 164, 217n1, 249, 293 Gini coefficient/gini index, 46 48, 51 52, 54, 108 110, 113, 128, 154, 155, 177, 190, 201, 266, 274, 277, 289, 294 glass ceiling effect, 200, 204, 205, 209, 215 global crisis, 1 3, 8, 18, 30, 95, 119, 123, 144, 174, 190, 198, 276 globalisation, 14, 15, 17, 20, 22, 25, 59, 60, 69, 77 78, 88, 171 see also trade openness
310 Index GMM estimator/estimation, 3, 4, 49 50, 51, 80, 85 great recession, 3, 13, 14, 18, 121 Herzegovina, 19, 65, 66, 254 household income, 6, 15, 16, 18, 21, 23, 28, 120 121, 123 125, 137 138, 271 Human Rights Act (1998), 251, 253 Hungary, 19 20, 21, 25, 29, 53, 62, 64, 65, 80, 86, 89n6, 89n7, 95, 98, 125, 132, 151, 156, 176, 199, 201, 206, 209, 215, 248, 254, 272, 275, 276, 292, 294, 297, 302 ICT capital, 61, 65, 80, 81, 82, 83, 85, 87 88 immigrants, 95, 260, 262 immigration, 93 94, 99 income, see capital income; functional income distribution; household income; income distribution; income inequality; income redistribution; individual income; labour income; personal income distribution income distribution functional versus personal, 14, 16, 21 22, 30 migration flows and, 22 23 primary, 23 27, 29 secondary and tertiary, 23, 27 29 see also wage distribution income inequality aversion to, see inequality aversion education and, see education groups effects of migration on, 22 23 emigration and, 93 95, see also emigration effects on wage inequality factors/drivers of, 16 18, 19 20, 23 30, 265 framework for, 14 16 gender and, see gender earnings inequality in NEUMs; gender wage inequality in Western Balkans government intervention in curbing, 20 impact of transition reforms on, 16, 20 21, 51 55 income mobility and, 125 128 and labour market duality, see labour market duality and labour market institutional settings, 25 27 personal, see personal income inequality and sequencing of reforms, 41 42 systemic change and, 18 23 and trade and technology, 23 25 and welfare state and taxation systems, 27 29 income mobility, 2, 5, 6, 20, 27, 119 121 and age of workers, 129 130, 138 data for assessment of, 123 125 drivers of, 129 137 in Eastern versus Western Europe, 125 128 and education levels, 130, 132, 138 and employment status, 130, 132 137, 138 and Fields Ok (FO) index, 121 123, 125 128, 137 gender and, 130 132 and household head attributes, 123, 124, 129, 131 132, 136 138 and household size, 130, 132 and income growth, 131, 132, 133, 136, 138 and income inequality, 125 128, 137 138 and labour market institutional settings, 133, 138 measures, 140 methodology for measurement, 121 123 and the presence of children and elderly, 130, 132, 136, 138 sample characteristics for study of, 124, 139 income redistribution, 265 266, 279 heterogeneity of preferences for, 276 278 social preferences estimation for, 266 270 see also inequality aversion
Index 311 individual income, 1, 15, 16, 23, 119, 120 123, 127, 277 individualisation, 249 250 inequality aversion alternatives for estimation of, 266 267 approach for estimation of, 267 270 Atkinson indices with, 281 data for, 270 271 definition of, 267 estimated coefficients of, 271 272, 280 heterogeneity in, 275 276 heterogeneous versus homogeneous, 277 278 and objective inequality, 273 274 outcomes of, 271 276 instrumental variables (IV) approach, 4, 73, 123, 129 Ireland, 22, 98, 99, 123, 141n4, 151, 154, 273 Italy, 120, 121, 151, 154, 162 164, 166, 251, 256, 262n1 job polarisation, 17, 24, 171 labour compensation, 65, 73, 86 Labour Force Survey (LFS), 8, 222, 228, 240n9, 241n20 labour income, 8, 13, 16, 17, 23, 63, 66, 82, 85, 86, 148 151, 152, 179, 198, 201, 210 see also labour shares labour market/labour markets, 23, 54, 108 duality in, 27, 133 see also labour market duality flexibility, 145 148 imbalances in, 15, 16, 18, 145 liberalisation of, 12, 26 27, 144 regulations, 59, 61, 63, 68 73, 78 80, 86 88, 89n4, 215, 231, 237 238 reforms, 17, 42, 70, 89n4, 89n6, 147, 148, 156, 163 see also labour market deregulation; labour market freedom/ labour freedom; labour market institutional settings/labour market institutions labour market deregulation, 4, 7, 8, 17, 61, 86 88, 170, 172, 175 176, 185, 188, 208, 209, 212 213, 215, 231 232, 238 labour market duality B O decomposition of the hourly wage gaps, 155 162, 163 164 components of earnings inequality, 155 163 components of hourly wages gap between permanent and temporary workers, 156, 159 163, 166 conceptual framework of, 145 148 data and preliminary evidence of, 151 155 decomposition technique for analysis, 148 151 hourly earnings by employment status, 152 154 hourly wages according to EU-SILC and SES, 166 hourly wages gap of permanent versus temporary workers, 154 155 variables used in the Mincerian equation, 165 labour market freedom/labour freedom, 61, 70 72, 78 80, 82, 86 87, 89n5 labour market institutional settings/ labour market institutions, 6 9, 16, 25 27, 63, 64, 119, 133, 138, 171, 187, 206 214 in Central and Eastern European countries, 216 deregulation, 4, 7, 8, 17, 61, 86 88, 170, 172, 175 176, 185, 188, 208, 209, 212 213, 215, 231 232, 238 role in gender earnings gap, 206 214, 231 232 union density, 7, 8, 26, 170, 175, 176, 181, 185, 188, 198, 208, 209, 212, 231 wage coordination levels, 7, 8, 170, 172, 176, 187, 188, 198, 212, 231
312 Index labour productivity, 64 65, 77, 81 83, 164 labour shares analysis parameters, 61 62 and business freedom, 70 and capital output ratio, 61, 68, 73, 75, 77, 87 causes of decrease in, 59 60, 67 and credit market freedom, 72 definition of, 65 determinants of, 65 68 dynamics of, 60 and economic determinants, 76 and economic freedom indicators, 72 73 effect of institutional factors on, 81 impact of technological factors on, 73 77 indicators of technological advances, 67 68 industry-level analysis of, 80 87 and international trade, 69 70 and labour market freedom, 71 and labour productivity growth, 64 65 literature on, 62 65 and market regulations, 68 73, 78 80 movements in, 65 68 real capital/gdp (1990 2010), 67 relative TFP (1990 2010), 67 68 and technological factors and market freedom, 82, 85, 88 trade openness and, 77 78, 79 in transition economies and in the EU-15, 65 67 see also capital labour substitution; globalisation; market regulations; technological changes/advances Latvia, 6, 44, 53, 95, 98, 100, 107, 126, 127, 137, 151, 155, 156, 176, 200, 206, 209, 215, 254, 275, 276, 294 legal origins theory, 9, 28, 247 248, 250, 251 liberal market economies (LMEs), 28, 133, 136 liberalisation, 12, 20, 26 27, 41 43, 64, 147, 175, 207, 216 of labour markets, 12, 26 27, 144 price, 4, 15, 16, 19, 20, 43, 44, 47, 52 54, 55, 89n4, 286 trade, 44, 46, 52, 54 Lithuania, 5, 9, 44, 53, 95, 98, 100, 107, 110, 113, 127, 151, 154, 155, 176, 199, 200, 206, 209, 215, 248, 253, 254, 259 260, 275, 294, 297 Macedonia, 8, 9, 44, 47, 54, 65, 66, 222 223, 226, 228 229, 230, 232, 234 239, 240n9, 240n11, 241n20, 254 market regulations, 59, 61, 68 73, 78 80, 86 88, 89n4, 215, 231, 237 238 migrants, 23, 93, 100, 103, 105 return, 98 temporary, 98 see also emigrants; immigrants migration, see emigration Mincer equation, 149, 152, 155, 156, 165 Montenegro, 8, 9, 222 223, 226, 228 232, 234 239, 240n9, 240n11, 254 neoliberalism, 29, 290, 297 298, 300 302 new European Union members (NEUMs), 12, 18, 26, 27, 30, 120, 125, 131 dual labour markets in, 145 148 education mismatch index in, 106 effects of emigration on wage inequality in, 94 95 emigration and employment rates by education in, 102 105 emigration and employment rates in, 100 103 emigration in, 96 100 hourly earnings by employment status, 203 impact of education groups on wage inequality in, 113 114, 182 187, 190 193 male/female hourly earnings, 201 202 net migration rates in, 99 100
Index 313 overall hourly wages inequality in, 107 108 real hourly wages by educational attainment, 108, 110 111 wage differentials in, 154 155, 159 164 see also gender earnings inequality in NEUMs non-ict capital, 61, 80, 81, 82, 85, 87 88 OECD countries, 26, 59 60, 63 69, 72, 78, 85, 87 88, 89n10, 89n11, 124, 144, 167n2, 175 Penn World Tables, 61, 65, 66, 69, 72, 75, 76, 79 permanent employment, 6, 7, 133, 145, 148, 163, 164, 174, 176, 184, 188, 214 personal income distribution, 14 16, 22, 23, 30, 41 55 passim, 151 see also personal income inequality personal income inequality effect of growth on, 48 49 empirical model of drivers of, 47 50 impacts of transition reforms on, 50 55 preliminary evidence of, 42 47 transition patterns and, 45 55 see also transition reforms Poland, 5, 9, 19 20, 21, 25, 29, 53, 62, 64, 65, 70, 89n6, 89n7, 95, 96, 125, 151, 154, 155, 159, 162, 199, 201, 206, 253 256, 275, 279, 292, 294, 297, 302 poverty, 11, 19, 120, 248 249, 261, 289, 294, 299, 302 price liberalisation (PL), 4, 15, 16, 19, 20, 42 43, 44, 47, 52 55, 89n4, 286 principle of progression, 252 253 Principle of Solidarity, see solidarity principle privatisations, 16, 19, 20, 21, 22, 27, 43 45, 53 55, 62, 63, 78, 89n4, 147 pro-inequality, 4, 16, 19, 21, 48, 52 55 risk aversion, 225, 267 268 Romania, 9, 19, 44, 46, 53, 62, 65, 66, 70, 71, 95, 96, 100, 123, 132, 141n3, 151, 155, 156, 176, 201, 204, 206, 256 258, 272, 273, 276, 277, 278, 293 routinisation hypothesis, 17, 171 Russia, 11, 19, 20, 21, 44, 47, 49, 52, 54, 254, 286 290, 298 302 self-employed income, 65, 202, 213, 214 Serbia, 8, 9, 65, 222 223, 225, 226, 228 239, 240n9, 240n11, 254 skill-biased technical change (SBTC), 17, 23, 24, 25, 88, 170, 171 Slovak Republic, 19, 29, 53, 62, 64, 65, 89n6, 95, 126, 132, 151, 176, 199, 206, 209, 275, 279 Slovenia, 25, 29, 44, 47, 61, 62, 64, 65, 80, 86, 95, 98, 125, 137, 151, 154 156, 159, 162, 173, 176, 200 201, 206, 209, 215, 254, 273, 279, 292, 294, 297, 298 Small Scale Privatisation (SSP), 42 43, 53 social spending, 285, 287, 288, 292, 294, 298, 299 social welfare function (SWF), 266, 267, 277 socialism, 10, 11, 63, 284 285, 287, 290, 299, 302 solidarity principle, 2, 9, 29, 247 249, 250, 252 Soviet Union, 1, 3, 10, 12, 13, 20, 30, 41, 42, 44, 47, 55, 167n2, 198, 225, 298 Spain, 98, 99, 120, 121, 125, 162, 256 state socialism, 10, 11, 285, 287, 290, 299 sticky floor effect, 200, 204, 205 Sweden, 22, 141n3, 151, 153, 157, 158, 159, 160, 166, 291, 293, 294, 296 taxation systems, 18, 19, 27 29, 247, 248, 252 254, 268
314 Index technological changes/advances, 4, 14, 15, 20, 25, 59, 77, 82, 87, 88, 171 indicators of, 67 68 real capital over GDP, 67 relative TFP (1990 2010), 67 68 temporary employment, 8, 27, 136, 138, 145, 146, 147, 162 163, 172 173, 175, 179, 184 185, 188, 208, 212 213, 215 Total Factor Productivity (TFP), 67 68, 73 76, 78 82, 87 trade liberalisation, 44, 46, 52, 54 trade openness, 22, 69 70, 73, 77 79 transition economies, 3, 4, 29, 42, 75, 147, 162 average labour shares in (1990 2010), 65 67 business freedom in, 70 capital intensity in, 67 68, 73, 74, 75, 78 credit market freedom in, 72 economic freedom indicators in, 72 73 indicators of technological advances, 67 68 industry-level analysis of labour shares in, 80 87 international trade in, 69 70 labour market freedom in, 71 literature on, 62 65 market regulations in, 68 73 movements in labour shares and determinants in, 65 68 real capital/gdp (1990 2010), 67 relative TFP (1990 2010), 67 68 trade openness in, 77 78, 79 transition reforms, 16, 20 21, 42 43 cluster analysis for measurement of, 43 47 correlation between EBRD reform indicators, 42 43 impacts on income inequality, 50 55 outcomes of the study on, 50 55 patterns and inequality, 46 47 pro-inequality effects of, 16, 52 55 speed and sequencing models, 45 UK, 22, 120, 121, 125, 136, 141n4, 151, 171, 174, 250, 251, 253, 273, 280 Ukraine, 19, 44, 52, 226, 254, 287, 289, 302, 303 unadjusted wage gap, 176, 200, 202, 223 227, 229 237 unemployment, 16, 20, 22, 26, 27, 63, 87, 105, 111 112, 133, 136, 137, 144, 146 148, 162 varieties of capitalism approach, 28 29 Visser Institute for Advanced Labour Studies database, 175, 208 wage disparity/inequality, see income inequality wage dispersion, 5, 19, 24, 25, 26, 43, 94, 110 112, 113 114, 144, 154, 199, 225 wage distribution, 23, 152, 171, 175, 205, 206, 208, 225 see also income distribution war, 47, 48, 49, 51, 52 welfare states/systems, 6, 10, 18, 27 29, 49, 138, 212, 247, 250, 260, 262, 273 and CIS reforms, 298 302 corporatist model, 28, 284, 285, 286 directions of change in, 302 303 and employment rates for women with/without children, 294 296 features of, 286 287 income inequality in, 294 labour market protection expenditure and unemployment rate, 293 liberal model, 28, 284 285 models of, 284 287 policy developments in the CEECs, 291 292 poverty rate before and after social transfers, 294 296 public social protection expenditure as a percentage of GDP, 291 292 social-democratic model, 28, 284, 285
Index 315 social spending as a percentage of GDP, 287 289 under state socialism, 285 287 welfare efforts in transition countries, 289 290 and welfare provision, 287 290, 299 300 Western Balkans (WBs), 8, 9, 12, 30, 41, 42, 44, 55, 222 223, 227, 229, 231, 232 236 239 see also Macedonia; Montenegro; Serbia workers, 18, 24 25, 59, 61, 63, 85 86, 88 B O decomposition of the hourly wage gaps of, 155 162, 163 164 components of hourly earnings gap between permanent and temporary, 156, 159 163, 166 crude rate of emigration and wage inequality, 108 110 effect of education groups on wage inequality of, 111 112, 182 187, 190 193 emigration of, 93 94 and employment protection, 26, 27, 64, 133, 146, 151, 167n2, 172, 207 female, 8, 100, 102, 147, 199, 200 204, 210, 224, 234 237 fixed-term, 133, 173 high-skilled/highly-educated, 17, 25, 65, 88, 94, 103, 170, 172, 176, 184, 185 hourly earnings by employment status, 152 154 hourly wages according to EU-SILC and SES, 166 hourly wages gap of permanent versus temporary, 154 155 low-skilled/low-educated, 7, 17, 26, 27, 59, 64, 65, 88, 94, 111 112, 148, 162 male, 8, 120, 146, 212 male/female hourly earnings of, 201 203 manual, 25 medium-skilled/medium-educated, 65, 88, 184 migrant, 93 non-manual, 25 non-unionised, 172, 206 older, 129, 146 permanent, 7, 26, 27, 148 151, 154 163, 172, 184, 187, 206 primary educated, 175, 182 184, 188 real hourly wages by educational attainment, 108, 110 111 routine, 171 secondary educated, 7, 175, 182, 185 188 temporary, 7, 26, 27, 120, 133, 138, 147 151, 154 163, 172, 184, 185, 187, 206 tertiary educated, 7, 175, 182, 185 188 unionised, 172, 206, 214 younger, 129, 147, 173 Yugoslavia, 1, 3, 13