The Part-Time/Full-Time Wage Gap in Central and Eastern Europe: the Case of Estonia

Abstract

Unlike Western countries, there are no studies focusing on the full-time/part-time wage gap in Central and Eastern Europe countries. The focus of this paper is the incidence and reasons for the part-time wage gap in Estonia, a small Eastern European catch up economy. We use Estonian Labour Force Survey data for 1997-2007, and the part time wage gap is decomposed using the Heckman selection model and Oaxaca-Blinder wage decompositions. The results indicate that for females the observable part-time wage premium is unexplained with the controls used in the analysis. For males, the full-time raw premium exists, but it is to a large extent captured by explanatory variables. For both genders, the labour market situation is remarkably better for voluntary part-timers. The probable explanations for this are the generally low wage levels, the cyclical behaviour of wage gaps, undeclared income and unobserved heterogeneity of employees and firms.