Reasons for Low Part-Time Employment in Eastern Europe – Any Role for Low Wages?

Abstract

Many Eastern European countries are characterized by high wage inequalities and a relatively low proportion of labour force being employed on a part-time basis, yet there seem not be so far made any studies on the part time pay penalty. In this article we analyse whether there are any differences in the average wages of part-time and full-time employed in Estonia, a small Eastern European catching up economy. We use Estonian Labour Force Survey data from years 1997-2007; the part time wage gap is estimated by using Oaxaca-Blinder wage decompositions and propensity score matching. The results are quite different for males and females. For females the raw wage gap is in favour of part-timers. After taking into account various worker characteristics, the wage gap becomes even larger. For males the full-time raw premium exists, but it is to a large extent explained by the different labour market characteristics.