Presentation of the resultsof the project "Gender pay gap in the Western Balkan countries: Evidence from Serbia, Montenegro and Macedonia"

BELGRADE, February 22, 2013  Employed women in Serbia have higher qualifications than men – but still earn less than men, according to new research, conducted in partnership between researchers from FREN and the Skoplje-based University American College Skopje (UACS), and supported by the Regional Research Promotion Programme and the Swiss Agency for Development and Cooperation. 

The resaults of the study Gender pay gap in the Western Balkan countries: Evidence from Serbia, Montenegro and Macedonia, which will be available in print in late March 2013, indicate that a woman in Serbia with the same labour characteristics as a man earns 11% less. Female disadvantage in Serbia is lower than in Montenegro and Macedonia, where women earn 16.1% and 17.9% less than men, respectively.

In other words, a woman in Serbia works “for free” for 40 days every year, compared with a man with the same characteristics. This so-called true (adjusted) gender wage gap has been calculated using econometric methods which make it possible to compare ‘apples with ‘apples’, i.e. women and men with the same characteristics, such as level of education and years of work experience, as well as women and men within the same occupation and within the same sector of activity. 

At the same time, the simple difference in the average female vs. male wage in Serbia, the so-called raw (unadjusted) wage gap, amounts to “only” 3.3%. This simple arithmetic difference hides the true magnitude of the gap, because women who work are better qualified as a group. Women in Serbia (as well as in Macedonia and Montenegro) face high barriers at the point of entry into the labour market, so they need to be better qualified than men on average to be able to access employment in the first place. In other words, while both low skill and high skill men work, a disproportionate number of high skill women work, since low skill women are often inactive. Moreover, high skill women, in terms of education and work experience, are able to access the better-paid occupations and sectors of the economy in Serbia (as well as in Macedonia, but not in Montenegro). Therefore, their average wages at the level of the entire economy are “only” 3.3% lower than male. However, if there were no discrimination, women would earn more than men because they are better qualified. When the results are adjusted for this fact, women are shown to earn 11% less than men. In other words, the low raw wage gap is the consequence of low female labour market participation, and as such, it is not ‘good news’.

The trend is the opposite of the one observed in Western economies, where working women, on average, are less qualified than working men. The raw, unadjusted wage gap that exists in every EU country (the average gap, according to Eurostat, is 16.2 percent), after controlling for men’s and women’s characteristics, is usually significantly narrowed (what remains can be attributed to the discrimination of women, for example, in employment, promotion, or based upon their unobservable characteristics).

These key findings were presented by Sonja Avlijaš and Marko Vladisavljević, researchers from the Foundation for the Advancement of Economics (FREN), and co-authors of the study, at a public event co-organized by FREN and UN Women (UN Entity for Gender Equality and the Empowerment of Women) at the hotel Metropol Palace in Belgrade. The presentation gathered over 30 representatives from embassies and international organizations, academia, women’s organizations, gender equality mechanisms and the media.

Speakers at the event also included Asya Varbanova, UN Women Officer in Charge for Serbia, and Marija Babović, head of SeConS think-tank and Associate Professor of Sociology at the University of Belgrade, who respectively offered a policy perspective and sociological reflections on the findings, and outlined possible responses of decision makers.

The true gender wage gap, which in Serbia stands at 11%, is often interpreted in economic literature as the effect of discrimination.  Econometric decomposition of this gap shows that in Serbia, unlike in Macedonia and Montenegro, women do not have smaller returns on the same labour market characteristics than men, i.e. they are not paid less than men for each additional year of education or for their choice of occupation. The true gap mainly exists due to the different returns between men and women on unobserved characteristics (unobserved due to data limitations in this analysis). These could include, Sonja Avlijas pointed out, “differences between female and male labour market behaviour which employers reward or punish within the same occupations and sectors of the economy” (e.g. women may be less flexible in terms of working hours or business trips due to home and reproductive responsibilities).

The study also shows that the wage gap can be found both in the public, and private sector; although the most pronounced gap is the one at the top of the wage distribution in the private sector, where women are paid 14 percent less than their male colleagues, indicating the presence of a glass ceiling, meaning that the highest paying jobs are less available to women with the same labour market characteristics as the men who obtain those jobs.

The research project “Gender pay gap in the Western Balkan countries: Evidence from Serbia, Montenegro and Macedonia” was a partnership between the Belgrade-based Foundation for the Advancement of Economics (FREN) and Skopje-based University American College Skopje (UACS), and has been supported by the Regional Research Promotion Programme in the Western Balkans (RRPP), run by the University of Fribourg upon a mandate of the Swiss Agency for Development and Cooperation (SDC).

More information about the project can be found here.