# **1. Introduction**

**This paper aims to understand gender inequality in the labor market and time use among marginalized Roma communities in the Western Balkans, using a household search model of the labor market with labor and fertility shocks and idiosyncratic spouses’ home production preferences.** The model contributes to our understanding of Roma spouses’ strategies when facing utility maximization over leisure, home production, and labor income.

**Although there are no recent reliable estimates of the Roma population in the Western Balkans, available estimates suggest that this ethnic minority may represent between 700,000 and 1,360,000 individuals in the region, approximately.** Census data allow for ethnic self-identification, likely leading to significant undercounting. According to the Council of Europe (CoE) estimates, the Roma population ranges from 20,000 in Montenegro to as high as 600,000 in Serbia. Proportionally, the Roma population represents from 1.7 percent of the total population of Kosovo, to as high as 9.6 percent of the population in North Macedonia (Robayo-Abril and Millan 2019).

**Roma women are one of the most deprived groups in Europe, as they suffer a double layer of exclusion: as women, and as members of Europe ́s largest ethnic minority.** According to the 2017 UNDP-WB-EC Regional Roma Survey<sup>2</sup> (hereafter RRS), Roma face higher unemployment rates than non-Roma populations living in close proximity, with females being particularly affected. On average, 53 percent of marginalized Roma females aged 15–64 in the Western Balkans are unemployed compared with 41 percent among Roma males. The labor force participation rate among Roma women is extremely low: in 2017, just 21.3 percent of Roma women participated in the labor market, compared to 49 percent of Roma males.<sup>3</sup> Limited access to jobs and socioeconomic rights keep Roma people trapped in a vicious cycle of poverty and social exclusion, where Roma women suffer the most, as they experience “double discrimination” (O’Higgins 2012).

**In the economic literature studying the labor market decisions of males and females, a strand of research has shown that biased conclusions can result from omitting the effects of family structure and the interdependence between one family member’s decisions and other family members’ conditions** . Moreover, household gender roles and restrictive social norms can create barriers for some members wishing to participate in the labor market. Becker (1981) considered that in order to navigate these barriers, family members should specialize in the production of the resource in which they have a comparative advantage. Our model focuses on spouses’ decision making, considering that the household head and his/her spouse are the main providers of resources. Additionally, defining the spouses as the unit of study helps to disentangle whether the observed gender gaps are due to differences in the labor market or due to differences in gender roles regarding leisure and home production.

**Given the Roma population’s low labor participation rate and lack of labor market opportunities, we are modeling the household decisions with a Unitary Spouses Joint Labor Search model. Search models are useful to understand labor market dynamics given the existence of frictions,**

> 2 The 2017 UNDP-WB-EC Roma Regional Survey is the most comprehensive survey to date on living conditions and human development outcomes among marginalized Roma households in the Western Balkans, as well as nonRoma households in the vicinity of Roma.

> 3 Population weighted regional statistics constructed with the 2017 Roma Regional Survey **.**

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