Embedded Inequality: The Case of Gender Pay Gap in Postsocialist Slovenia

Theories of postsocialist inequality either emphasize the potentially equalizing effect of markets, or persistence of advantages accumulated during socialism into the transition period. We argue that these theories are incomplete because they ignore the role of organizational settings in which pay is negotiated.

We develop an embedded theory of inequality in that we emphasize how differences between pay for men and women are embedded, structured, by organizations in which people work, which can ameliorate or exacerbate differentiation, as the broader socio-economic system transforms from command to market economy. Moreover, inequality is embedded because economic institutions are intertwined with cultural and legal institutions, and because categorical distinctions, such as gender and cohort, work intersectionally, rather than separately. Thus we expect to see that market expansion brings heightened uncertainty and differentiation along traditional gender lines but those can be mediated by persistence of socialist institutions of collective bargaining, and for cohorts which established their careers during socialism.

We use matched employer-employee data to examine gender differences in pay over a 15-year period (1993-2007) in Slovenia. The central finding of our analysis is that there was a substantial increase in gender inequality over this period, and that the organization of gender inequality changed as well. In the period from 1993-1997, both the overall gender pay gap and the within- job wage gap were roughly 15 percent, but by 2003-2007 men on average earned roughly 23 percent more than women, and 18 percent more than women doing the same work for the same employer. However, most of the growth in gender pay inequality can be accounted for by substantial differences between women and men born in younger cohorts, rather than older ones.