Female Wages in the Egyptian Textiles and Clothing Industry: Low Pay or Discrimination?

Analysis of the wage gap has most usually been carried out across the formal sector as a whole, missing nuances of differences in pay in specific occupations. This paper analyses data from a new survey of firms and workers in the textiles and clothing sector collected in 2009. These data allow explanation of the sector’s gender wage gap by poorer endowments, relegation of women to low–paying firms and occupations and by within-firm and within-occupation differential in returns. There is a pay gap in this sector, with men receiving an hourly wage 29 percent higher than that of women. This gap arises partly as women are concentrated in the lower paid occupations and lower-paying firms. There is clear glass ceiling in effect with women least represented in the highest paying management positions. Somewhat surprisingly, differences in returns favor women, and, the intra-occupational pay gap is reversed once characteristics, including firm characteristics, are controlled for. Failure to control for firm characteristics (as in most studies) will over-estimate the gap. Outright discrimination is the sole reason for discrimination within the sector and could be partially explained by the difference between the role society expects of men and that it expects of women, the former being the main bread earner. The largest of the pay gap is attributable to differences in endowments such as worker education and experience (more than 70 per cent of the gap). Thus, closing the pay gap is not just a matter of equal pay for equal work, as is now being discussed in Egypt, but of enhancing women’s capabilities to ensure equality of opportunity on entering the labor force.