Skip to main content

Studies of labour markets in countries in transition in South East Europe


Kecmanovic, Milica (2010). Studies of labour markets in countries in transition in South East Europe. Master's thesis / Doctoral dissertation.


This thesis explores several aspects of the labour market in Serbia and Croatia during the process of transition from socialism to a market economy. First, it examines how women’s position in the labour market has changed in Serbia. Using five annual Labour Force Surveys (2001-2005), I find that the gender wage gap is still very low in Serbia, and is even decreasing during this period. However, decompositions that apply the Oaxaca (1974) methodology reveal that the unexplained component of the gap is very large, and is increasing. Likewise, quantile decompositions suggest that while the raw gap is falling at each of the quantiles analysed, the unexplained component is increasing at most quantiles at the same time. Thus, the relatively small gap in earnings could be masking considerable discrimination in the labour market.
Second, changes in men’s wage inequality in Serbia in the period from 2001 to 2005 are analysed using five annual Labour Force Surveys. Changes in the distribution of earnings are examined using the Lemieux (2002) decomposition methodology. I find that the change in wage inequality is mostly driven by changes in wage premiums, while the effect of changes in the composition of the labour force is very small. Isolating the effect of the emerging private sector reveals that changes in the private sector size and wage premium account for an average 25 percent of the changes in inequality during this period.
Third, the effect that the recent war in Croatia (1991-1995) had on the educational and employment trajectories of the 1971 birth cohort of men is investigated. This birth cohort was most affected by the armed forces draft. I treat the occurrence of the war as a natural experiment and use data from the Croatian and Slovenian Labour Force Surveys. Applying the difference-in-difference framework and comparing this cohort to adjacent cohorts, women, and to respective cohorts in Slovenia, a neighbouring country that did not experience war, I find that the war has had a negative effect on educational outcomes and a small positive effect on the employment and earnings outcomes of this cohort of men.

Reference Type


Year Published



Kecmanovic, Milica