Cities 42 (2015) 109117

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Cities
journal homepage: www.elsevier.com/locate/cities

The female labour force in an urban economy during transition: A view

from the City of Nis
Jelena Stankovic a,, Nikola Makojevic b,1, Vesna Jankovic-Milic a,2, Marija Radosavljevic a,2
a
University of Nis, Faculty of Economics, Serbia
b
University of Kragujevac, Faculty of Economics, Serbia

a r t i c l e i n f o a b s t r a c t

Article history: The aim of this paper is to analyse labour force quality and wage issues in the third largest city in Serbia
Received 30 January 2014 in the post-socialist period. The paper examines the differences in wages and labour force quality, looking
Received in revised form 22 September 2014 at the gap created as a result of differences in the amount of earnings and employers perception of labour
Accepted 8 October 2014
force quality. The ndings show that there are no signicant differences in the level of wages, but that
Available online 27 October 2014
there is a signicant difference in the labour force quality according to the employers test results. The
research reveals a positive correlation between the share of female employees and employers perception
Keywords:
of the labour force quality, whereby an increase of 1% in the female share has resulted in an increase in
City of Nis
Female labour force
the employment quality rate by 0.439.
Wage gap 2014 Elsevier Ltd. All rights reserved.
Quality gap

Introduction The phenomenon of gender inequality has been explained by

The engagement of women in economic activity is increasing
every day. Nowadays, they play a signicant role in the world
economy and thus contribute to sustainable economic growth.
Women constitute 40% of the workforce in the world, and their
active engagement in productive work contributes not only to
faster economic growth but also to its long-term sustainability.
According to Postic, Djurkovic, and Hodzic (2006), gender is an
individual design of identity or expression that conrms or denies
socially formed and assigned gender roles of men and women,
which by denition determine the social roles of men and women.
Gender equality does not deny the existence of gender differences,
but promotes equal participation of women and men in society,
and implies that all human beings are free to develop their per-
sonal abilities and make choices without the limitations imposed
by strict gender roles (One hundred words for equality, 1998).
The perception of equality is important from different points of
view, such as recruiting, payment, training and promotion and
rewarding (Jepsen & Rodwell, 2012).
Corresponding author at: Trg kralja Aleksandra Ujedinitelja 11, 18000 Nis,
Serbia. Tel.: +381 18 528 655, mobile: +381 64 111 75 00.
E-mail addresses: jelena.stankovic@eknfak.ni.ac.rs (J. Stankovic), nmakojevic@
kg.ac.rs (N. Makojevic), vesna.jankovic@eknfak.ni.ac.rs (V. Jankovic-Milic), marija.
andjelkovic@eknfak.ni.ac.rs (M. Radosavljevic).
1
Address: ure Pucara Starog 3, 34000 Kragujevac, Serbia.
2
Address: Trg kralja Aleksandra Ujedinitelja 11, 18000 Nis, Serbia.
different authors in different ways. The Nobel Prize winner,
Becker (1957), formulated the theory of labour market discrimina-
tion, where the level of discrimination is determined by a discrim-
ination coefcient. A discrimination coefcient is a measure of the
degree to which the employer is willing to lose or achieve a smaller
income, in order to avoid interacting with individuals who belong
to a particular group (gender). A similar explanation of gender dis-
crimination in terms of preferences has been given by Blau and
Ferber (1992), and Baldwin, Butler, and Johnson (2001).
Another group of authors, among whom is Robinson (1933),
look at discrimination as the result of a non-competitive labour
market. The assumption is that men and women are equally pro-
ductive and are therefore perfect substitutes. However, due to
the assumption about the elasticity of the supply of male and
female workers, the salary offered to men is higher than the salary
offered to women. Burdett and Mortensen (1998), Manning (2003)
and Ransom and Oaxaca (2005) have come to similar conclusions.
Arrow (1972) sees the discrimination as a phenomenon related
to statistical discrimination or proling. It implies that individuals
are evaluated according to the demographic characteristics of the
group to which they belong, and not on their personal abilities.
The increased risk associated with the distribution of female pro-
ductivity contributes to their earnings being lower than mens.
The fundamental principles underpinning Arrows (1971) and
Phelps (1972) theory were later conrmed by their investigations,
as well as by subsequent analysis carried out by Aigner and Cain
(1977) and Dickinson and Oaxaca (2006).

http://dx.doi.org/10.1016/j.cities.2014.10.006
0264-2751/ 2014 Elsevier Ltd. All rights reserved.
110 J. Stankovic et al. / Cities 42 (2015) 109117
Looking at ofcial International Labour Ofce data on womens
participation in the labour market between 1980 and 2008, it is
clear that the rate of female labour force participation increased
from 50.2% to 51.7%, while the rate of male labour force participa-
tion declined from 82.0% to 77.7% (International Labour Ofce,
2009a). Abramo and Valenzuela (2005) examined the progress
achieved in the rates of female labour force participation, and the
continuing gap between men and women in terms of access to
quality jobs, unemployment, nancial and non-nancial compen-
sation and social protection. The results show that inequality still
exists, although in some segments there are visible improvements.
Losa and Origoni (2005) discuss the issue of the socio-cultural
dimensions of womens choices (in terms of preferences for work
engagement and daily working hours) in order to identify the prob-
lem which causes the gap in gender participation in the labour
market. As a result of their socio-cultural choices, there is a
decrease in womens productivity in the market with an increase
in volume of work they do at home. As women are traditionally
(and in most instances invariably) responsible for household jobs,
a signicantly larger amount of household jobs remain in the
domain of women, regardless of whether they are employed or
not (Rogers & Amato, 2000).
Promoting equal opportunities for women and men is an area of
social policy that has received much attention in recent years. Reg-
ulatory rules in this area were originally designed to ensure the
equal rights of individuals. However, deciencies in regulations
are observed when attention is paid to certain aspects of gender
inequality in the labour market (Atkinson, 2000). One of the most
important and easily veriable aspects of gender inequality is the
difference in salaries between men and women. This difference is
the result of a complex combination of factors. Relevant factors
that determine the difference in salaries between the genders are
emphasized: age, family situation and number of children, level
of education, career breaks, job security, type of contract, working
hours, the sector in which they work (public or private sector),
occupation, rm size, etc. (Atkinson, 2007). Gender differences also
appear when the type of employment is observed. In the case of
self-employment, women are less represented than men: among
the 17% of those who have declared themselves as entrepreneurs,
or self-employed, only about one-third are women (Goudswaard
& Andries, 2002; Huijgen, 2000; Paoli & Merlli, 2001).
Consequently, the aim of this paper is to provide the rst anal-
ysis of gender issues at an urban level during the transition period
in the Serbian economy. Although the gender issue is increasingly
present in the public domain and the state recognizes its impor-
tance, so far there has not been any academic research on the
female labour force at the urban level. The structure of this paper
consists of two parts along with the introduction and conclusion.
In the rst part, the methodology and data are explained, and in
the second, the ndings are presented.
The position of the female labour force in the Serbian economy
Although it has been more than 20 years in the process of tran-
sitional change from a socialist system, the Serbian economy is still
characterized as transitional. Unfortunately, this prolonged tran-
sition period has not been evaluated as favourable by EBRD, since
the reforms of enterprises for the period 20032007, made an
insufcient improvement from 2 to 2.3 points (EBRD, 2010). As sta-
ted in the research results of some authors (Kikeri & Kolo, 2005)
who deal with transition and post-transition issues, privatization
dropped off after 1997. However, this has not been the case for Ser-
bia. Due to certain disturbances, the transition period in Serbia has
been interrupted several times, which has led to the fact that it is
still in process. For this reason, one of the Serbian governments
priorities in the 21st century, is privatization or, to be more precise,
the ending of the privatization process. The negative consequences
of long-term transition are reected in low rates of economic
growth and high unemployment rates. Certain similarities with
some other developing countries which have been through transi-
tion period may be noticed, and used with the aim of successfully
completing the transition process in Serbia.
In an analysis of the current status of the female labour force
within Serbian economy, it is necessary to consider the period of
socialism, when Serbia was constituent part of the former Socialist
Federal Republic of Yugoslavia. Female participation in paid work
was favourable during the self-management of Yugoslavia. In the
period from 1953 to 1971 female labour market participation in
the 2034 age group increased from 50.8% to 54.6%, while for the
3549 age group this increase was even higher, i.e. from 34.9% to
60.2% (Petrin & Humphries, 1980). Furthermore, in the same per-
iod, an increase in the percentage of women with secondary and
higher education reduced the education gap in comparison to male
workers. Unlike during the period of socialism, most of the female
labour force in recent years has been faced with the heavy and neg-
ative consequences of the transition period. According to the of-
cial statistics of the World Bank, the development of the Serbian
labour market in the transition period has been unfavourable and
the employment rates for both women and men have decreased
drastically (World Bank, 2004). However this decrease has affected
the female labour force to a much higher degree than the male.
There are a number of scientic studies which examine the
position of the female labour force in transition economies
(Adamchik & Bedi, 2000; Falaris, 2004; Fonseka, Wang, &
Manzoor, 2013; Newell & Reilly, 2001; Orazem & Vodopivec,
1997) and a few in particular have focused on the Serbian labour
market (Kecmanovic & Barrett, 2011; Krstic, Litcheld, & Reilly,
2007; Krstic & Reilly, 2000; Lokshin & Jovanovic, 2003;
Ognjenovic, 2009). Though it may not be said that it is negligible,
the pay gap between men and women in transitional countries is
smaller compared to in developed countries. This means that the
relative pay position of women has not deteriorated. In contrast
to this, for example, in East Germany, the pay gap between women
and men has decreased. One of the reasons for over 40% of the rise
in womens wages has been the withdrawal of poorly qualied
women from employment (Newell & Reilly, 2001). As far as Serbia
is concerned, it has to be noticed that the female participation rates
were continuously decreasing and they stood at below 60% by the
end of 1990s (Krstic & Reilly, 2000), indicating that the participa-
tion of women in this period was below the level reached in the
70s. The male participation rate also decreased, but it stood at a
much higher level over 70%. This trend suggests that the female
participation in the labour market in Serbia during the last two
decades has followed quite a similar pattern to other Central and
Eastern European or former Soviet Union countries (Brainerd,
2000). Considering the fact that market liberalization is one of
the characteristics of countries in transition, it may be said that
those countries face less wage discrimination than they did while
their economies were more closed (Brainerd, 2000).
The position of the female labour force in Serbia will be ana-
lysed through (1) the number of employees and the percentage
of women among employees, (2) average wages and (3) educa-
tional structure. Also, due to the signicant regional differences
in Serbia, all these data will be presented in regions. Regions are
dened as administrative units under the Law on Regional Devel-
opment (Assembly of the Republic of Serbia, 2009), according to
which the territory of Serbia is divided into ve statistical regions.
Because the data for Kosovo and Metohija are not available, further
analysis includes four administrative units.
A tendency that may be noticed in Table 1 is that in most of the
observed regions the total number of employees is decreasing,
 J. Stankovic et al. / Cities 42 (2015) 109117 111

while the female percentage share is increasing. This leads to the

46.15%

48.68%

42.21%

44.94%

43.32%
46.68%

48.83%
47.96%

46.44%
44.33%

45.89%
42.48%
44.30%

44.10%
41.03%
assumption that even though the total number of employees is
decreasing, women are managing to keep their jobs, due to the
quality of the female labour force. This observation has been the

Women
leading idea for formulating the framework of the research and

47

43

48

101
32
797
626
171
276
229

206
163

182
134

133
the evaluation of the level of discrimination in the labour market
in Serbia.
In addition to the data presented in Table 1, data from Table 2

386
567
469

488
351

405
292
113
307
229
98

97

78
1727
1341
2012
Total
show that there is a clear increase in female wages for the last
two observed years. This increase is evident for all regions in the
Republic of Serbia. It may also be noticed that, at the same time,

45.88%

48.87%

45.34%

44.42%

42.48%

40.85%
46.46%
43.92%

49.46%
46.55%

45.39%
41.82%

43.16%
46.05%
43.40%
there is an increase in gross wages for men. However, what is
not a positive tendency is the fact that even higher female wages

Women
are still lower compared to the increase in male wages and that
the increase in male wages is not followed equally by an increase

801
624
177
282
228

209
163

179
133

130
54

46

46

101
29
in female wages. What can also be noticed is that in the region
where the wage increase has the highest value, the difference

1746
1343

577
461
116
461
354

403
293

306
234
403

106

110

71
2011
Total
between the increase in male and female wages is more signicant
(the Region of Vojvodina).
In Table 3 it can be seen that the largest number of people with

44.82%

48.24%

44.28%

43.13%

41.03%
45.68%
42.18%

47.76%

46.15%
38.52%

44.48%
39.66%

42.37%
36.84%
high and higher education3 is in the Region of Belgrade and in the

50.00%
Region of Vojvodina. Especially in those regions the gender salary
differences are more emphatic compared to the other regions in Ser-

Women
bia. It is also important to note that the total number of highly edu-

805
619
186
288
224

209
162

179
133

128
64

47

46

28
100
cated women is greater than the total number of highly educated
men. Therefore, the reduction in the education gap which occurred
in the 1970s, during the period of socialism, has led to the fact that

1796
1355
441
597
469
128
472
351
122
415
299
116
312
236
76
Total
2010
there are a greater number of women with higher education in the
later period of transition. The only region where the number of
The gender structure of employees in Serbia in the period from 2008 to 2012. Source: Statistical Ofce of Republic of Serbia, 2013.

highly educated women is lower than the number of highly educated

44.13%

46.91%

43.78%

43.64%

41.25%
44.95%
42.68%

45.99%

44.75%
41.18%

45.16%

43.03%
36.05%
50.00%

40.00%
men is South-Eastern Serbia, where the City of Nis is situated. How-

The bold values represent the summary data for both employed in legal entities and entrepreneurs with their employees.
ever, in Nis, this difference is almost negligible and the percentage
Women

share of highly educated women is 49.75%.

70
838
628

288
218

218
162

192

139
210

56

140
52

108
31
140

310
130

86
1899
1397
492
614
474

498
362
136
440

337
251
Total
2009

Data and methodology

The city of Nis is the largest city in southern Serbia and the
43.72%

46.66%

43.53%

42.74%

40.22%
44.19%
42.56%

45.49%

44.41%

43.83%

41.83%
41.40%

40.40%

36.00%
50.00%

third-largest city in Serbia (after Belgrade and Novi Sad). According

to the 2011 Census, the city has an urban population of 187,544
inhabitants, while its administrative area has a population of
Women

260,237 (Statistical Ofce of Republic of Serbia, 2012b). The city

81

65

61

110
36
874
631
243
293
212

232
167

203
142

146

covers an area of 597 square kilometres (231 sq. mi), including

the urban core, the town of Niska Banja and 68 suburbs. Nis is
the administrative centre of the Nisava District. Although Nis is
571
628
466
162
533
376
157
475
324
151
363
263
1999
1428

100
Total
2008

perceived as an important regional centre, it is increasingly losing

its production capacities due to the inconsistencies between
resources and the development process (Vasilevska, Vranic, &
Annual average number of employees in 1000 per region

Marinkovic, 2014).
In the socialist period (from the 1960s until the 1990s) the
economy of Nis was dominated by big companies in the tobacco
industry, electronics industry, construction industry, mechanical
engineering, the textile industry, colour metal industry, food
processing industry and rubber based industries. More than
Entrepreneurs and their employees

Entrepreneurs and their employees

Entrepreneurs and their employees

Entrepreneurs and their employees

Entrepreneurs and their employees

50,000 people worked in these industries.

After 2000, when the transition process ofcially started, Nis
Sumadija and Western Serbia

Southern and Eastern Serbia

lost its economic strength due to the incomplete strategy in the

Employed in legal entities

Employed in legal entities

Employed in legal entities

Employed in legal entities

Employed in legal entities

privatization process. As the result of all that, apart from the

Region of Vojvodina

tobacco industry (bought by US Philip Morris), the industry of

Region of Belgrade
Republic of Serbia

Nis did not survive. According to ofcial data, Nis currently has
36,947 unemployed people, making the unemployment rate
36.70% (National Employment Agency, 2013).
Table 1

3
The term higher education means a university education at the undergraduate,
masters and doctoral studies level.
112 J. Stankovic et al. / Cities 42 (2015) 109117

Table 2
Changes in gross wages in the last two years. Source: Statistical Ofce of the Republic of Serbia, 2013.

Average gross wages per region 2011 2012 Increase in %

Female Male Total Female Male Total Female Male Total
Republic of Serbia 54,792.00 60,148.00 57,580.00 56,765.00 63,157.00 60,080.00 3.60 5.00 4.34
Region of Belgrade 66,333.00 75,492.00 70,875.00 66,779.00 77,575.00 72,188.00 0.67 2.76 1.85
Region of Vojvodina 51,571.00 57,176.00 54,465.00 54,334.00 62,168.00 58,342.00 5.36 8.73 7.12
Sumadija and Western Serbia 47,931.00 50,317.00 49,193.00 50,231.00 53,136.00 51,760.00 4.80 5.60 5.22
Southern and Eastern Serbia 47,085.00 52,977.00 50,365.00 49,830.00 53,638.00 53,638.00 5.83 1.25 3.54

Table 3
The educational structure of the population by gender in Serbia. Source: Statistical Ofce of the Republic of Serbia, 2013.

Total Without educational Incomplete primary Primary Secondary High Higher Unknown
attainment education education education education education
Republic of Serbia t 6,161,584 164,884 677,499 1,279,116 3,015,092 348,335 652,234 24,424
m 2,971,868 30,628 241,226 593,463 1,613,356 173,132 308,824 11,239
f 3,189,716 134,256 436,273 685,653 1,401,736 175,203 343,410 13,185
Region of Belgrade t 1,426,710 16,751 58,259 198,842 749,079 117,137 279,642 7000
m 666,315 3,382 14,465 81,736 378,887 55,635 128,794 3416
f 760,395 13,369 43,794 117,106 370,192 61,502 150,848 3584
Region of Vojvodina t 1,654,339 38,475 176,738 359,761 842,142 81,030 151,844 4349
m 797,100 9,059 59,318 163,456 454,978 38,643 69,783 1863
f 857,239 29,416 117,420 196,305 387,164 42,387 82,061 2486
Sumadija and t 1,733,212 58,835 240,810 406,000 818,188 81,728 121,276 6375
Western Serbia m 847,202 8,715 92,889 196,086 445,367 42,212 59,101 2832
f 886,010 50,120 147,921 209,914 372,821 39,516 62,175 3543
Southern and Eastern t 1,347,323 50,823 201,692 314,513 605,683 68,440 99,472 6700
Serbia m 661,251 9,472 74,554 152,185 334,124 36,642 51,146 3128
f 686,072 41,351 127,138 162,328 271,559 31,798 48,326 3572

The bold values represent the summary data for both employed in legal entities and entrepreneurs with their employees.

The research within this paper includes 120 enterprises and
entrepreneurs and it corresponds to a proportional structure of
the employers in the city of Nis. According to the Statistical Ofce
of the Republic of Serbia, 81.82% of the employees in Nis are
employed in enterprises, while 18.18% are entrepreneurs
(Statistical Ofce of Republic of Serbia, 2012a).
The research was conducted in 2013. The questionnaire was
designed for employers and contained 25 questions concerning
the gender structure of employees, education level of employees,
employers perceptions about the quality of employees and the
amount of earnings in the respondent companies.
The basic hypotheses in this research are the following:
H1. Earnings in companies with a mainly male labour force are
higher than earnings in companies with a mainly female labour
force.
H2. There is a disproportion between the quality of the female
labour force and their achieved wage.
In order to test these hypotheses it was necessary to:
 Classify all enterprises and entrepreneurs in two groups accord-
ing to the female share as mainly female or mainly male.
 Test the signicance of differences in average wages between
those two groups.
 Test the signicance of the difference in the employee quality
rate between those two groups.
 Examine the correlation between the female labour force share,
wage and employee quality rate.
 Examine the inuence of the female labour force share in a
company on the employee quality rate.
 Classify all the enterprises and entrepreneurs in the sample into
homogenous groups according to their female labour force
share, wage and employee quality rate.
The methods used in order to conduct the analyses listed above
are: descriptive statistics, t-test for the equality of means, correla-
tion analysis, regression analysis and cluster analysis.
The sample includes 9818 employees of which 3801 are
females. Such a gender structure (38.42% of female employees)
corresponds to the gender structure of the global labour force
where the share of female employees is 40% (International
Labour Ofce, 2009b). The number of highly educated employees
in the sample is 839. The number of female employees with high
education is 371, representing 9.76% of the total number of females
in the sample.
As far as the types of businesses are concerned, all enterprises
and entrepreneurs in the sample were classied into four groups:
(1) construction companies, (2) industry, (3) service companies
and (4) companies in the eld of recycling and ecology. The reason
why recycling is separated from the rest of the industry is the
strategic and economic signicance of developing this branch,
not just for the City of Nis, but for Serbia as well. Namely, the latest
report of the European Commission, at the very moment of the
commencement of accession negotiations with the EU, clearly
emphasizes that environmental protection in Serbia is at a low
level. On the other hand, the recycling industry in Nis has been a
successfully developing eld of industry in recent years. The struc-
ture of the sample according to business type is presented in Table 4.
The average net wage in enterprises in the sample is 25,164.87
RSD, while the average net wage of entrepreneurs is considerably
lower, amounting to 20,670.75 RSD. The amounts are in Serbias
ofcial currency The Serbian Dinar,4 and represent the net average
wages in the companies included in the sample during the previous
business year. The highest average net wage is in recycling compa-
nies where it amounts to 25,894.00 RSD. The lowest average salary
4
According to the National Bank of Serbia on December 31st, 2012 the exchange
rate was 1 = 113.3771 RSD, or 1 = 138.7725 RSD.
 J. Stankovic et al. / Cities 42 (2015) 109117 113

Table 4
Structure of sample and average net wage: cross-tabulation preview.

Construction Industry Services Recycling Total

Enterprises Number in sample 5 64 23 8 100
Average net wage 22,248.40 25,811.67 23,831.58 25,894.00 25,164.87
Entrepreneurs Number in sample 0 10 10 0 20
Average net wage - 20,876.80 20,464.70 - 20,670.75
Total Number in sample 5 74 33 8 120
Average net wage 22,248.40 25,135.66 22,841.32 25,894.00 24,415.85

is in construction companies and it amounts to 22,248.40 RSD. Table 7

Average net wages in all four groups of companies are given in The structure of the sample according to the branch and share of female labour force.

Table 4. The average net wage in the sample is 24,415.85 RSD. Female share Branch Total
Based on the data from Table 5, it can be seen that the sample Construction Industry Service Recycling
includes small, medium and large enterprises (classication
<50%
according to the Law on Accounting and Auditing, Assembly of Count 5 43 17 7 72
the Republic of Serbia, 2013). The most numerous type of % Within the branch 6.9% 59.7% 23.6% 9.7% 100.0%
enterprise in the sample is small enterprises (74.2%), except in % Within the female share 100.0% 58.1% 51.5% 87.5% 60.0%
construction, where the majority of enterprises in the sample are P50%
medium-sized (60%). Count 0 31 16 1 48
% Within the branch 0.0% 64.6% 33.3% 2.1% 100.0%
% Within the female share 0.0% 41.9% 48.5% 12.5% 40.0%
Findings

Bearing in mind the rst hypothesis H1, it was necessary to

determine the participation of women, or percentage of the female As Table 7 shows, the enterprises in the production branch are
share in each company in the sample. This percentage ranges from mostly mainly male, because there are 58.1% of enterprises
0% (only men), to 100% (only women). Enterprises and entrepre- which are mainly male, while the mainly female enterprises
neurs where the share of female employees is higher than 50% cover 41.9% of all enterprises in this branch. Unlike those, the
are in the group named mainly female, while enterprises and group of service companies is characterised by a nearly balanced
entrepreneurs where the share of female employees is lower than ratio of mainly male and mainly female enterprises (51.5%
50% represent a group named mainly male. There are 72 mainly compared to 48.5%). In order to test the rst hypothesis it was nec-
male and 48 mainly female enterprises and entrepreneurs essary to calculate the average wage within the dened categories
(Table 6). (mainly female and mainly male) of examination units (enter-
The next table (Table 7) provides data about the structure of the prises and entrepreneurs). The results are presented in Table 8.
dened categories (mainly female and mainly male) according The average wage in the male labour force dominated group is
to the branch. higher (25,330.15 RSD) compared to the average wage in the
mainly female (23,044.39 RSD). The coefcient of variation
values indicate greater wage variability in the mainly female
Table 5
Structure of sample according to branch and size of enterprise: cross-tabulation
examination units (30.29% compared to 28.89%). The question is
preview. whether the observed difference in average wage is statistically
signicant. In order to test the statistical signicance of observed
Number of employees Total
differences in average wage, a t-test for equality of means was
Small Medium Large conducted. The results are presented in Table 9.
Branch The results show no statistically signicant difference in
Construction Count 2 3 0 5 average wage between mainly female and mainly male exam-
% Within Branch 40.0% 60.0% 0.0% 100.0%
ination units, because the signicance level (p-value = 0.09) is
Industry Count 52 15 7 74 higher than 0.05. Thus, although there is a gender wage gap in
% Within Branch 70.3% 20.3% 9.5% 100.0%
Service Count 29 3 1 33
% Within Branch 87.9% 9.1% 3.0% 100.0%
Table 8
Recycling Count 6 2 0 8 Average wage in the sample according to the female share.
% Within Branch 75.0% 25.0% 0.0% 100.0%
Category Average wage Standard Coefcient of
Total Count 89 23 8 120 (in RSD) deviation variation (%)
% Within Branch 74.2% 19.2% 6.7% 100.0%
mainly male 25,330.15 7317.42 28.89
mainly female 23,044.39 6980.03 30.29

Table 6
Sample structure according to the share of female labour force.

Category Female share Total Table 9

Results of t-test for equality of means.
Up to 50% More than 50%
Value of Degrees of p-Value Mean Std. error
Enterprises 65 35 100 t-statistic freedom (2-tailed) difference difference
Entrepreneurs 7 13 20
Total 72 48 120 1.707 118 0.090 2285.75 1338.83
114 J. Stankovic et al. / Cities 42 (2015) 109117

the sample, it is not statistically signicant, so its existence cannot Table 12

be generalized. Employee quality rate by examination units.

The research further focuses on testing the signicance of the Examination units Employee quality rate Total
differences in the level of employee quality between those two Up to 3.97 More than 3.97
groups. In the research, employers rated the quality of the labour
Enterprises 52 48 100
force by qualitative assessments in four levels: excellent, good, sat- Entrepreneurs 6 14 20
isfactory and bad. Most of the employers estimated the quality of Total 58 62 120
the labour force in their companies as good (39.35%) and excellent
(30.55%). The cross-tabulation results between branch and quality
assessment are presented in Table 10.
The quantication of these qualitative assessments is achieved Table 13
by applying the Likert scale (Likert, 1931), where the highest level Average quality rate in the sample according to the female share.
excellent is rated with 5, and the lowest level with 2. The average Category The average rate of labour Standard Coefcient of
rates are determined by multiplying the number of employees force quality deviation variation (%)
within an observed level with the level rate and then dividing by
mainly 3.89 0.60 15.42
the total number of employees in the company (Table 11). male
The average rate of labour force quality in the sample amounts mainly 4.20 0.55 13.10
to 3.97. Looking across the groups, in 58 examination units (48.33% female
of all units) the employee quality rate is below 3.97, while in 62
examination units (51.67% of all units) the employee quality rate
is higher than the average value. The structure of the examination
units (enterprises and entrepreneurs) according to the employee Table 14
quality rate is given in Table 12. Results of t-test for equality of means.
An analysis of the employee quality rate according to the Value of Degrees of p-Value Mean Std. error
dened categories (mainly male and mainly female) is further t-statistic freedom (2-tailed) difference difference
conducted. The results of this analysis are presented in Table 13. 2.785 118 0.006 0.304 0.109
The average quality rate of employees is different in the dened
categories of examination units. The average quality rate of
employees is higher in the mainly female examination units
(4.20 compared to 3.89) and, in the same time, the value is higher to examine these variables by using Spearmans correlation coef-
than the overall average quality rate. In addition, variation in the cient (Spearman, 1907). This coefcient is a nonparametric indica-
quality rate (CV = 13.10%) is smaller than in the mainly male tor of quantitative agreement between variables. The Spearman
examination units (CV = 15.42%). The signicance of the difference rank correlation coefcient has a broader meaning than a simple
in the mean values of the employee quality rate was also tested by linear correlation coefcient. While a simple linear correlation
t-test for equality of means (Table 14). coefcient indicates the presence of a linear stacking of variation
In Table 14 the p-value showing the level of signicance between two variables, Spearmans rank correlation coefcient
amounts to 0.006. This is lower than 0.05, and so it is possible to indicates whether there is monotonic connection between the
conclude that there is a signicant difference in the average quality two variables. A monotonic relationship means any permanent,
rate between those two categories of examination units. This con- growing or declining correlation between the variations of the
clusion supports the conrmation of hypothesis H2, because the two variables.
results of the research show that the female labour force, although Spearmans rank correlation coefcient can take a value from
rated with a higher quality, appears to be paid less. 1 (perfect negative correlation) to 1 (perfect direct or positive
In previous analyses three key variables emerged: the female correlation). If the value of this coefcient is closer to the extreme
labour force share, wage and employee quality rate. It is possible values, a greater degree of correlation exists between the observed

Table 10
Cross-tabulation results between branch and quality assessment.

Construction (%) Industry (%) Services (%) Recycling (%) Average for quality rate (%)
Excellent 35.00 31.79 31.76 11.25 30.55
Good 22.00 39.73 39.38 46.63 39.35
Satisfactory 30.00 25.48 24.62 37.50 26.23
Bad 13.00 3.00 4.24 4.63 3.88
Total 100.00 100.00 100.00 100.00 100.00

Table 11
Average labour force quality rates according to the branch.

N Mean Std. deviation Std. error 95% Condence interval for mean Minimum Maximum
Lower bound Upper bound
Construction 5 3.7900 0.76354 0.34147 2.8419 4.7381 3.00 4.80
Industry 73 4.0032 0.60081 0.07032 3.8630 4.1433 2.80 5.00
Service 34 3.9868 0.63959 0.10969 3.7636 4.2099 2.90 5.00
Recycling 8 3.6450 0.26142 0.09243 3.4264 3.8636 3.20 3.96
Total 120 3.9657 0.60387 0.05513 3.8566 4.0749 2.80 5.00
 J. Stankovic et al. / Cities 42 (2015) 109117 115

variables, and vice versa. Various authors give different interpreta- Table 16
tions of the correlation values between 0 and 1. Cohen (1988, pp. Parameter estimates in the multiple regression model.

7981) gives the following guidelines for the strength of Variables Non-standardized coefcients t Sig.
correlation: B Std. error
Constant 3.176 0.451 7.038 0.000
(a) Weak: rs = 0.100.29. Female share 0.439 0.382 1.147 0.017
(b) Medium: rs = 0.300.49. Percentage share of higher 0.201 0.432 0.465 0.643
(c) Strong: rs = 0.501.0. educated employees
Wage 0.000083 0.000 0.501 0.618

In addition to the female labour force share, wage and employee

quality rate, correlation analysis included the percentage share of
higher educated employees. According to the results presented in
Table 15, there is a weak positive correlation between the female
share and labour force quality rate (rs = 0.247). The variable wage
is negatively correlated with both the labour force quality rate
and female share. The correlation between the wage and labour
force quality rate (rs = 0.059) is not statistically signicant, while
the correlation between wage and female share is weak, but statis-
tically signicant (rs = 0.239). The obtained values of the correla-
tion coefcient conrm a disproportion between the quality of the
female labour force and their achieved wage. The results of corre-
lation analysis pointed out that there is a connection between the
key variables in this research. The quality of the female force
labour does not exist explicitly in this research as an empirical var-
iable, but this latent variable could be expressed by the female
labour forces share of the overall labour force quality rate. There-
fore, it is possible to conclude that the quality of the womens
labour force could be quantied by calculating the female labour
forces share of the labour force quality rate. In order to quantify
this relation, multiple regression analysis was applied. The depen-
dent variable in regression analysis was the employee quality rate,
while the independent variables were: the female share, percent-
age share of higher educated employees and wage.
The results of the multiple regression analysis applied in this
research are shown in Table 16. The estimation model was based
on the 120 observations i.e. examination units (enterprises and
entrepreneurs). According to the value of the determination coef-
cient (R square = 0.019) it cannot be stated that the model is repre-
sentative, which means that results obtained cannot be
generalized. Variations in the employee quality rate can be
explained to some extent by selected independent variables,
because in this research the quality rates of employees are the
results of the managers subjective perceptions. The values of
regression coefcients lead to the conclusion that the employee
quality rate is mostly inuenced by the female share. Namely,
the value of the coefcient (B coefcient = 0.439) indicates that
an increase in the female share by 1% inuences the average
increase in employee quality rate by 0.439. This inuence is statis-
tically signicant (p-value = 0.017). The percentage share of higher
educated employees has a positive inuence on the employee
quality rate, but this inuence is not statistically signicant.
Table 17
Size of the created clusters.
Cluster Number of examination units
1 83
2 34
3 3
According to the regression coefcient value, variable wage has a
negative impact on changes in the employee quality rate, which
supports the conclusion that the female labour force, although paid
less, is rated as the one with a higher quality.
In order to classify the examination units into homogenous
groups, a multivariate statistical method called a cluster analysis
was applied. Cluster analysis, also called segmentation analysis
or taxonomy analysis, seeks to identify homogeneous subgroups
of cases in a population. This method identies a set of groups
which both minimize within-group variation and maximize
between-group variation. In this research K-means cluster analysis
was applied. Variables for which similarity is the basis for exami-
nation units grouping are: the female labour force share, wage
and employee quality rate. The number and size of the obtained
clusters are shown in Table 17.
The application of cluster analysis in the Statistical Package for
the Social Sciences includes a special algorithm which classies
objects into their nearest cluster. The algorithm for this form of
cluster analysis is the method of nearest centroid sorting
(Anderberg, 1973). The cluster centre is the mean of all variables,
calculated on the basis of all units that compose the cluster. After
the association of all the new units, it is possible to recalculate
the cluster centres. These centres are called the nal cluster centres
(Table 18).
According to the values of the nal cluster centres, it is possible
to conclude that in Cluster 1 there are examination units (enter-
prises and entrepreneurs) where the female share is above average,
as well as the labour force quality rate. The average value of third
variable for clusterization is below the average value in the sample.
Cluster 2 includes enterprises and entrepreneurs where the female
share is below average, and the labour force quality is slightly

Table 15
Values of Spearmans Correlation Coefcient.

Variables Labour force quality rate Female share Wage Percentage share of higher educated employees
Labour force quality rate Coefcient 1
p-Value
Female share Coefcient 0.247** 1
p-Value 0.007
Wage Coefcient 0.059 0.239** 1
p-Value 0.520 0.009
Percentage share of higher educated employees Coefcient 0.089 0.091 0.170 1
p-Value 0.335 0.323 0.063
**
Correlation is signicant at the 0.01 level (2-tailed).
116 J. Stankovic et al. / Cities 42 (2015) 109117
Table 18
Final cluster centres.
Variables Cluster
1 2 3
Female share 45% 28% 45%
Labour force quality rate 4.04 4.01 3.73
Wage (RSD) 20,959.14 31.00862 51.33333
below average. The wage level in this Cluster is above average.
Cluster 3 contains examination units that are above average in
the female share and wage, while the quality of employees is rated
below average. The results of the cluster analysis point out that the
majority of companies are classied in Cluster 1 (83 companies), in
which the average share of the female labour force is 45%. Com-
pared to other cluster averages, the quality rate in Cluster 1 is
the highest (4.04) and at the same time the average wage is the
lowest, amounting to 20,959.14.
Conclusion
Within this paper we have analysed the relationship between
labour force quality and wages in two dened groups, mainly
male and mainly female companies, operating in the third larg-
est city in Serbia, Nis. The results show that the differences in
wages are not statistically signicant between those groups, but
at the same time there is a statistically signicant difference in
the labour force quality as assessed by employers. Furthermore,
the results show that an increase in the size of the female labour
force in a company leads to an increase in the labour force quality.
The results show, as well, that despite the difference in the
employers perception of quality level in favour of the female
labour force, the female labour force is paid less. More precisely,
wage is negatively correlated with both the labour force quality
rate and the female share.
These results suggest that there is an economically unjustied
negligence of the female labour force. The explanation for this
may be found in traditional concepts of the role of women in
business. The transition, along with the changes in institutional
framework, have not brought about (or not had sufcient inuence
on) the expected changes in womens roles despite the efforts of
the Government, local authorities and NGOs.
Appendix A. Supplementary material
Supplementary data associated with this article can be found, in
the online version, at http://dx.doi.org/10.1016/j.cities.2014.10.
006.
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