Decomposing Gender Wage Differentials in Urban Ethiopia: Evidence from Linked Employer-Employee (LEE) Manufacturing Survey Data
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%.
Volume (Year): 35 (2006)
Issue (Month): 1 ()
|Contact details of provider:|| Web page: http://www.tandfonline.com/RGER20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/RGER20|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jeremiah Cotton, 1985. "A comparative analysis of black-white and Mexican-American-White male wage differentials," The Review of Black Political Economy, Springer, vol. 13(4), pages 51-69, March.
- Jacques Mairesse & Nathalie Greenan, 1999.
"Using Employee Level Data in a Firm Level Econometric Study,"
NBER Working Papers
7028, National Bureau of Economic Research, Inc.
- Nathalie Greenan & Jacques Mairesse, 1999. "Using Employee Level Data in a Firm Level Econometric Study," CIRANO Working Papers 99s-12, CIRANO.
- Simon Appleton, 1996.
"The gender wage gap in three African countries,"
Economics Series Working Papers
WPS/1996-07, University of Oxford, Department of Economics.
- Even, William E. & Macpherson, David A., 1990. "Plant size and the decline of unionism," Economics Letters, Elsevier, vol. 32(4), pages 393-398, April.
- Barro, Robert J & Lee, Jong Wha, 1996. "International Measures of Schooling Years and Schooling Quality," American Economic Review, American Economic Association, vol. 86(2), pages 218-23, May.
- Erling Barth & Harald Dale-Olsen, 1999. "Monopsonistic Discrimination and the Gender-Wage Gap," NBER Working Papers 7197, National Bureau of Economic Research, Inc.
- Kucera, David & Milberg, William, 2000. "Gender Segregation and Gender Bias in Manufacturing Trade Expansion: Revisiting the "Wood Asymmetry"," World Development, Elsevier, vol. 28(7), pages 1191-1210, July.
- Schafgans, Marcia M. A., 2000. "Gender wage differences in Malaysia: parametric and semiparametric estimation," Journal of Development Economics, Elsevier, vol. 63(2), pages 351-378, December.
- David Neumark, 1988.
"Employers' Discriminatory Behavior and the Estimation of Wage Discrimination,"
Journal of Human Resources,
University of Wisconsin Press, vol. 23(3), pages 279-295.
- David Neumark, 1987. "Employers' discriminatory behavior and the estimation of wage discrimination," Special Studies Papers 227, Board of Governors of the Federal Reserve System (U.S.).
- Yun, Myeong-Su, 1999. "Generalized Selection Bias and The Decomposition of Wage Differentials," IZA Discussion Papers 69, Institute for the Study of Labor (IZA).
- Madden, D., 1999.
"Towards a Broader Explanation of Male-Female Wage Differences,"
99/11, College Dublin, Department of Political Economy-.
- David Madden, 2000. "Towards a broader explanation of male-female wage differences," Applied Economics Letters, Taylor & Francis Journals, vol. 7(12), pages 765-770.
- David Madden, 1999. "Towards a Broader Explanation of Male-Female Wage Differences," Working Papers 199911, School Of Economics, University College Dublin.
- Blau, Francine D & Kahn, Lawrence M, 1996. "Wage Structure and Gender Earnings Differentials: An International Comparison," Economica, London School of Economics and Political Science, vol. 63(250), pages S29-62, Suppl..
- Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 2, number 9780226041162.
- Seguino, Stephanie, 2000. "Gender Inequality and Economic Growth: A Cross-Country Analysis," World Development, Elsevier, vol. 28(7), pages 1211-1230, July.
- Abowd, J.M. & Kramarz, F. & Margolis, D.N., 1995.
"High-Wage Workers and High-Wage Firms,"
Cahiers de recherche
9503, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
- Abowd, J.M. & Kramarz, F. & Margolis, D.N., 1995. "High-Wage Workers and High-Wage Firms," Cahiers de recherche 9503, Universite de Montreal, Departement de sciences economiques.
- John M. Abowd & Francis Kramarz & David N. Margolis, 1994. "High-Wage Workers and High-Wage Firms," CIRANO Working Papers 94s-23, CIRANO.
- John M. Abowd & Francis Kramarz & David N. Margolis, 1994. "High Wage Workers and High Wage Firms," NBER Working Papers 4917, National Bureau of Economic Research, Inc.
- Claudia Goldin, 2002. "The Rising (and then Declining) Significance of Gender," NBER Working Papers 8915, National Bureau of Economic Research, Inc.
- Oaxaca, Ronald L. & Ransom, Michael R., 1994. "On discrimination and the decomposition of wage differentials," Journal of Econometrics, Elsevier, vol. 61(1), pages 5-21, March.
- Gunderson, Morley, 1989. "Male-Female Wage Differentials and Policy Responses," Journal of Economic Literature, American Economic Association, vol. 27(1), pages 46-72, March.
- Cotton, Jeremiah, 1988. "On the Decomposition of Wage Differentials," The Review of Economics and Statistics, MIT Press, vol. 70(2), pages 236-43, May.
- Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
- Lucifora, Claudio & Comi, Simona & Brunello, Giorgio, 2000. "The Returns to Education in Italy: A New Look at the Evidence," IZA Discussion Papers 130, Institute for the Study of Labor (IZA).
- Cardoso, Ana Rute, 1997. "Workers or Employers: Who Is Shaping Wage Inequality?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 59(4), pages 523-47, November.
- UNICEF Innocenti Research Centre. MONEE project, 1999. "Women in Transition," Regional Monitoring Report remore99/1, UNICEF Innocenti Research Centre.
When requesting a correction, please mention this item's handle: RePEc:taf:glecrv:v:35:y:2006:i:1:p:43-66. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty)
If references are entirely missing, you can add them using this form.