| Summary: | Education resides in schooling and training. In addition to knowledge and competences, the first contributes
in acquiring a proper thinking and good behaviour. Training focuses on gaining the know-how for doing a specific task
while schooling fails if it does not complement training and go beyond it. Both directions are relevant in order to tear
down bricks in the wall of the rural-urban wage gaps. Nothing endures without education and as long as this is not
consolidated in the rural environment, existing wage-gaps may continue to grow. Such an aspect will furthermore
impact positively the migration phenomenon reducing its burden on the Romanian economy, as the low educated with a
suitable training tend to migrate abroad or internally to urban areas in search of unqualified jobs with higher
earnings.
The current study aims to determine the drivers of the differences in earnings between rural and urban
workers by using the Blinder-Oaxaca decomposition method. The results show that rural workers get paid less than
their urban counterparts. Individual’s level of education has a positive effect on wages for both rural and urban
workers. This also implies a greater positive effect for workers in urban environment. The results also indicate that an
important part of wage inequality is explained by education. As a result, less and high educated workers from rural
area will be rewarded relatively, on average, less than their counterparts from urban area.
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