The Gender Wage Gap in Croatia – Estimating the Impact of Diff ering Rewards by Means of Counterfactual Distributions

Th e aim of this paper is to estimate the size of, changes in, and main factors contributing to gender-based wage diff erentials in Croatia. It utilizes microdata from the Labor Force Surveys of 1998 and 2008 and applies both OLS and quantile regression techniques to assess the gender wage gap across the wage distribution. Th e average unadjusted gender wage gap is found to be relatively low and declining. Th is paper argues that employed women in Croatia possess higher-quality labor market characteristics than men, especially in terms of education, but receive much lower rewards for these characteristics. Th e Machado-Mata decomposition technique is used to estimate the gender wage gap as the sole eff ect of diff ering rewards. Th e results suggest that due to diff ering rewards the gap exceeds 20 percent on average twice the size of the unadjusted gap and that it increased somewhat between Danijel Nestić The Institute of Economics, Zagreb, Croatia [email protected] CroEconSur Vol. 12 No. 1 April 2010 pp. 83-119 Received: December 12, 2009 Accepted: March 23, 2010 Original Scientifi c Paper