When the opportunity knocks: large structural shocks and gender wage gaps

Undergoing a large structural shock, labor markets may become less inclusive. We test for this thesis analyzing the behavior of adjusted gender wage gaps in a wide selection of transition countries. We estimate comparable measures of adjusted gender wage gaps for a comprehensive selection of transition countries over a period spanning nearly three decades. We combine these estimates with measures of labor market reallocation in transition economies to uncover the relation between worker flows and the gender wage gap. Results indicate that in periods of reallocation, the adjusted wage gaps increase. Distinguishing between flows according to their contribution to structural transformation reveals the distinctive role paid by separations from the state-owned manufacturing sector, usually leading to greater adjusted gaps. The emerging new sectors in the economy tend to be more inclusive in the short run, associated with a lower adjusted gender gap. In the medium run, the adverse effect of greater separations from the old sector is even more pronounced, while the emergence of the new sector is less relevant.