Roma integration in European labor markets

Gaps in education and health status and differences in returns to characteristics

Gaps in education and perceived health are considerable (see Figure 4). One robust finding is that the average years of education of vulnerable Roma are substantially lower than those of non-Roma living in proximity to them. The gap is generally larger for women than for men, underscoring the additional disadvantage of Roma women in access to education. While the Roma self-report a bad health status more often than non-Roma in a majority of countries, the gaps are generally smaller than for education. However, gaps in access to health care or health insurance are generally larger and disfavor Roma populations [1].

Do such gaps in human capital explain Roma/non-Roma differences in labor market outcomes? One recent investigation of the nexus between human capital and the labor market used 2004 UNDP data on vulnerable Roma in southeastern Europe [4]—including Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Kosovo, Macedonia, Montenegro, and Serbia (excluding Kosovo)—to disentangle the causes of labor market gaps between vulnerable Roma and non-Roma living in proximity to them [6]. The returns to years of schooling in terms of employability are significantly higher for non-Roma than for Roma workers. This result becomes even stronger after accounting for the endogeneity of educational attainment—that is, the possibility that the relationship between educational attainment and employment is driven by the decision to stay in school longer (motivated by an expectation of improved employment prospects) rather than by an enabling role of education in securing employment.

This study further finds that a large part of the employment gap cannot be explained by differences in characteristics of Roma and non-Roma (such as differences in educational attainment) and is rather due to differences in returns to characteristics (such as different pay premiums for a university degree) or unobserved factors, which may include gaps in ethnic or social capital as well as discrimination.

Further support for these findings is found in the analysis of a data set of four Hungarian surveys conducted between 1993 and 2007 [7]. The analysis shows that gaps in educational attainment are a primary explanatory factor for the gaps between Roma and non-Roma employment rates, whereas the geographic distribution of Roma and non-Roma populations does not play much of a role after controlling for differences in education. In addition, the number of children in the household is important for female employment. Educational attainment and number of children in the household, while important, do not account for the entire employment differential, however; a considerable part remains unexplained by individual characteristics.

Several studies have examined wage differentials as a proxy for disparities in job quality or occupational segmentation. One study found that the returns to education (in terms of earnings) are similar for Roma and non-Roma populations, even after accounting for shortcomings in the data (the sample included only people willing to report their income and working in the formal economy as employees) and for the endogeneity of schooling [6].

Another study, which also used the UNDP 2004 data set for Albania, Bulgaria, Croatia, Kosovo, and Serbia [4], attempted to disentangle the causes of labor market gaps between vulnerable Roma and non-Roma living in proximity to them [8]. That study showed that major parts of the observed income gaps were due to differences in human capital characteristics, including education and work experience. Additional gaps were due to the sorting of Roma and non-Roma into full-time or high-skilled jobs. In fact, in all countries except Albania and Kosovo the part of the pay gaps that remained unexplained after controlling for these differences was not significantly different from zero.

Yet another study, which identified a significant wage gap between Roma and non-Roma women in the Athenian labor market, argued that only a relatively small part of the wage differential could be explained by a broad set of observable characteristics. The larger part of the gap was attributable to differing returns to characteristics (for example, differing pay premiums for different university degrees), differences in social or ethnic capital, or other unobservable factors such as discrimination. The study also showed that sorting across occupations and sectors did not affect this result significantly [9]. The study based on the four Hungarian surveys between 1993 and 2007 confirms these results: Differences in characteristics can explain only about half of the wage gap between employed Roma and non-Roma populations (not accounting for differences in selection into employment) [7].

An important factor possibly affecting the estimated gaps between Roma and non-Roma in wages or employment quality is (self-)selection into labor market participation or employment. If Roma face barriers to labor market participation or employment, it is likely that the Roma who succeed in overcoming the barriers possess some labor market skills that are superior to those of their non-Roma counterparts, who do not need to cope with such barriers. If, due to data limitations, this difference in skills between participating or employed Roma and non-Roma cannot be accounted for in statistical analysis, comparing observably similar Roma and non-Roma populations underestimates the true gaps. This is because the true gaps between Roma and non-Roma with the same characteristics, observed and unobserved, are partly offset by the extra, unobserved skills that the successful Roma possess.

Policy implications

The studies reviewed here have important implications for policy. The results indicate that the Roma/non-Roma gaps are, to a large extent, due to socio-economic segmentation even before Roma and non-Roma workers enter the labor market. Additionally, closing the education gap between Roma and non-Roma may not be sufficient to provide equal chances in the labor market, as differentials in returns appear to be the norm. These findings also indicate that labor market gaps between Roma and non-Roma populations are due both to differences in social class—the vulnerable, marginalized status of the Roma populations as manifested by, for example, Roma’s lower educational attainment—and to disparities in ethnic or social capital, or discrimination. Certainly, however, marginalization may itself be related to these disparities in a non-trivial way.

If the gap in educational attainment is a particularly important factor in explaining the differences in labor market outcomes for Roma and non-Roma populations, it will be instructive to shed light on its cause. While one study has shown that the differences in factors affecting the educational attainment of Roma and non-Roma do not differ much, one notable exception is the educational disadvantages of Roma who live in areas of high Roma concentration. Residential segregation thus appears to be one of the key determinants of Roma/non-Roma educational gaps. But it could also be the case that educated Roma leave these areas. Another structural difference identified in the analysis is that whereas both Roma and non-Roma populations living in urban areas have higher educational attainments than those living in rural areas, this effect of urbanization is much smaller for the Roma. This difference is probably a result of the large concentrations of Roma among low-educated population groups in urban and rural areas alike [6].

Intergenerational transfer of human capital is another important mechanism through which Roma/non-Roma gaps in human capital are perpetuated. In Bosnia and Herzegovina, Croatia, Montenegro, and Serbia, the educational attainment of household heads is strongly linked to the educational attainment of children, an effect that is especially powerful among the Roma [10]. Differences in achievement between Roma and non-Roma eighth graders on standardized tests in reading and math are explained largely by health, parenting, family background, and segmentation across schools and classes [7].

Synthesizing this evidence, it appears that multiple vicious circles are at play. Substandard socio-economic outcomes of the Roma reinforce each other and are perpetuated through the intergenerational transfer of human capital. These factors also engender negative attitudes and inhibit trust between Roma and non-Roma, which breeds ill-chosen integration policies and leads to (statistical) discrimination. This, in turn, further propagates socio-economic segmentation. In this adverse environment, the Roma may face tension—or even trade-offs—between their ethnic and cultural capital on the one hand and socio-economic integration on the other. Roma women are exposed to yet another tier of barriers, probably stemming from gender stereotypes and social norms within Roma communities.