Continued decline for ethnic minorities in the transition? Changes in ethnic earnings differentials in Bulgaria, 1986, 1993 and 1997

Using three Bulgarian cross-sectional household surveys from 1986, 1993 and 1997, this essay shows that the mean log wage differential between ethnic Bulgarians and Turks increased from 0.1615 in 1986 to 0.2874 in 1993 and again to 0.4075 by 1997. Bulgarian gains over ethnic Turks in the early transition are related to both changes in the relative returns to skill and changes in the composition of demand for goods and services as the country moved toward a market economy. The Turks began the transition with fewer years of education than the Bulgarians, and began to close the education gap over this time. The Bulgarians, however, were more likely to have obtained more general secondary and university degrees than the ethnic Turks - degrees that, in contrast to technical or vocational degrees, are experiencing increased remuneration in the transition. With more of an asset that has become more valuable, the ethnic Bulgarians improved their relative position.