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Decomposing Gender Wage Differentials in Urban Ethiopia: Evidence from Linked Employer-Employee (LEE) Manufacturing Survey Data

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  • Tilahun Temesgen

Abstract

This study estimates the magnitude of gender wage differentials for a sample of workers from the Ethiopian manufacturing sector using the traditional Oaxaca-Blinder and an augmented Cotton-Neumark methodologies. In doing so, it separates part of the estimated log of gender wage differential explained by differences in human capital characteristics between men and women from that which is not explained by such differences. The latter is known in the literature as “treatment” component or “discrimination” due to differing pay structures for the two gender groups. Accordingly, it is found that in Ethiopia's manufacturing sector men on average get up to 30% more than women depending on the measure used. However, once we control for a number of individual and establishment level characteristics, the level of wage premium for men over women is close to 5% or around 12 Ethiopian cents per hour. Out of this, both decomposition procedures estimate that close to 60% of the premium is a result of discrimination (different treatment of men and women in the labour market). Using an augmented decomposition technique, it is found that out of the 60% “discrimination component” close to 13% is due to men's treatment advantage in the labour market and the remaining 47% is due to women's treatment disadvantage. Also it is found that firm level characteristics are important contributors to the total discrimination component. Without controlling for establishment level characteristics, the discrimination component would have been around 27% indicating that ignoring establishment characteristics in decomposition exercises would result into a biased estimation, and in this case it would have underestimated the level of discrimination by close to 50%.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Global Economic Review.

Volume (Year): 35 (2006)
Issue (Month): 1 ()
Pages: 43-66

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Handle: RePEc:taf:glecrv:v:35:y:2006:i:1:p:43-66

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Related research

Keywords: Wage determinants; economics of gender; wage differentials; wage gap; sex discrimination; economic models; labour market; statistical analysis; Ethiopia;

References

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Citations

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Cited by:
  1. Christophe Nordman & Faly Rakotomanana & Anne-Sophie Robilliard, 2009. "Gender Disparities in the Malagasy Labour Market," Working Papers DT/2009/08, DIAL (Développement, Institutions et Mondialisation).
  2. Nordman, Christophe Jalil & Robilliard, Anne-Sophie & Roubaud, François, 2011. "Gender and Ethnic Earnings Gaps in Seven West African Cities," Economics Papers from University Paris Dauphine 123456789/4305, Paris Dauphine University.
  3. Christophe J. Nordman & François-Charles Wolff, 2009. "Gender differences in pay in African manufacturing firms," Working Papers hal-00421227, HAL.
  4. Christophe Nordman & Anne-Sophie Robilliard & François Roubaud, 2009. "Decomposing Gender and Ethnic Earnings Gaps in Seven West African Cities," Working Papers DT/2009/07, DIAL (Développement, Institutions et Mondialisation).
  5. Richard U. Agesa & Jacqueline Agesa & Andrew Dabalen, 2013. "Sources of the Persistent Gender Wage Gap along the Unconditional Earnings Distribution: Findings from Kenya," Oxford Development Studies, Taylor & Francis Journals, vol. 41(1), pages 76-103, March.

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