This paper extends the earlier literature on the effects of return migration by studying selection and labour market performance in terms of the wages of young returnees in particular. The topic is motivated by various labour market issues for young people and their high exposure to the consequences of the recent financial crisis. We use Estonian Labour Force Survey data and Estonian Population and Housing Census 2011 data in combination with Estonian Tax and Customs Office data on individual payroll taxes. The econometric analysis focuses on the selection to temporary migration and the estimation of wage premium to return, along with the decomposition of the returnee-stayer wage gap using the Oaxaca-Blinder approach and an investigation of wage premium dynamics over time after return. The results generally show higher returns from temporary labour migration for young people relative to older people, and among youth, the share of the unexplained fraction of the wage premium is also higher. These results imply a stronger role of experience gained abroad on earnings for youth.

Purpose: The purpose of this paper is to better understand the possible reasons behind gender pay disparities, focussing on the unique features of male and female human capital and their wage returns. Despite increasing convergence of male and female human capital attainments, substantial differences remain. Extraction of human capital components non-overlapping across genders provides more profound explanation of the unexplained wage gap of men and women.Design/methodology/approach: Starting with the non-parametric matching-based decomposition technique, the authors extend the pay gap estimation framework and focus on males and females having no counterpart in a set of characteristics within the opposite gender. The authors identify gender-unique human capital in terms of differences in distribution of individual characteristics across men and women and gender-specific combination of human capital characteristics. Wage returns to gender-specific profiles are evaluated applying wage regression on both full distribution of earnings and wage quantiles. The research relies on the Survey of Adult Skills (PIAAC) database for Estonia, which incorporates both formal education and cognitive skill records.Findings: The study identifies sets of characteristics and competencies exclusive for both genders, proving that male and female profiles cannot be directly compared. The results suggest that men possess high individual and combined abilities in numeracy and problem solving in technology-rich environment, not always reached by females. This potentiates men’s higher earnings in spite of their generally lower formal educational attainments. Wage gap analysis over the full distribution of earnings shows even larger “glass ceiling” effect for females, possessing woman-specific human capital.Originality/value: The authors raise a research from a novel perspective towards a role of human capital in gender wage inequality. Instead of usual reference to observable gaps in male and female characteristics, the authors identify the gender-specific human capital profiles, to a large extent non-reached by the opposite gender. Analysed associations between gender-specific characteristics and earnings provide an insight to possible effects of gender-unique human capital on a male-female wage disparity.

Purpose: The purpose of this paper is to address the role of cognitive skills and extent of skill use at work in explaining the immigrant–native wage gap in Europe. The study targets immigrant–native disparities in literacy and numeracy cognitive skills, as important, yet not exhaustive factor behind immigrants’ wage penalty.Design/methodology/approach: The research relies on the Program of International Assessment of Adult Competencies data for 15 European countries. The empirical analysis employs multivariate regression analysis and incorporates the full set of plausible values for each skill domain, to correctly measure cognitive skills. To estimate standard errors, the authors employ Jackknife replication methodology with 80 replication weights and final population weight.Findings: The authors document that, on average, immigrants achieve substantially worse scores in literacy and numeracy test domains. Only highly educated immigrants tend to improve their skills over time in host countries. The results of wage gap analysis indicate that having cognitive skills, demographic profile and occupation category comparable to natives does not yield comparable wage rate. The remaining wage gap results from the systematic differences in skills application at work, as immigrants use their skills to lower extent, relative to natives.Originality/value: The research employs a novel measure of productive human capital, which accounts for cognitive skills in literacy and numeracy domains, and frequencies of skill use at work. It allows to more precisely evaluate the immigrant–native disparity in human capital application and its reflection on the wage rate.

The paper investigates the gender wage gap in relation to the multi-dimensional human capital measure, asking which human capital components are most valued in the European labour markets. Relying on the Programme of International Assessment of Adult Competencies (PIAAC) data for seventeen European countries and applying Gelbach ( 2016 ) decomposition, we document remarkable cross-country disparities in the returns to different human capital components. The only dimension that consistently and significantly decreases gender wage disparities in all countries is work experience related to a currently occupied position. Numeracy cognitive ability is another strong predictors of the gender wage disparity, while job-specific cognitive and non-cognitive skills reveal weaker than expected association with the gender wage gap. Unlike the studies stressing the decreasing importance of human capital in the gender wage gap assessment, we argue that a narrow definition of human capital may undermine the actual effect of the latter.