THE PART-TIME/FULL-TIME WAGE GAP IN CENTRAL AND EASTERN EUROPE: THE CASE OF ESTONIA

Unlike Western countries, there are no studies focusing on the fulltime/part-time wage gap in Central and Eastern Europe despite high wage inequalities observable in many of these 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 for females indicate that the part-time premium observable is unexplained with the controls used. 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, black income and unobserved heterogeneity of employees and firms.