Using the stochastic frontier approach to determine the gender wage gap and labour market efficiency

Ognjenović, Kosovka (2023) Using the stochastic frontier approach to determine the gender wage gap and labour market efficiency. In: 17th International Symposium on Operational Research in Slovenia, SOR '23 : Bled, Slovenia, September 20-22, 2023. Slovenian Society Informatika - Section for Operational Research, Ljubljana, pp. 277-280. ISBN 978-961-6165-61-7

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Abstract

This paper analyzes the gender wage gap, as this issue has been insufficiently studied in the labor market of the Republic of Serbia. Using data from a panel study derived from a survey on income and living conditions, the paper examines whether the crisis caused by the COVID-19 pandemic has affected the extent of the wage gap in the Republic of Serbia. The paper employs the stochastic frontier model, which is used to determine the discrepancy between men's and women's wages and the differences in efficiency in the labor market. The results of applying this approach confirmed that there is a statistically significant difference between men's and women's wages and that participants in the labor market differ in their efficiency, which is measured by the difference between realized and potential wages of workers.

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