Determinants of Gender Wage Gap in the Manufacturing Sector of Pakistan A Comparison of Labor Force Surveys 2001-02 & 2010-11

Abstract

The study empirically examines the determinants of gender wage gap in manufacturing sector of Pakistan by comparing Labour Force Survey (LFS) of 2001-02 and 2010-11. Gender wage gap is defined as the difference in wages of male and female workers employed in the labour market having same characteristics such as education level, labour market experience, technical training, and place of residence. As explained by Oaxaca and Blinder approach (1973) the gender wage gap can be decomposed into two parts. The first part is explained by differences in wages due to productivity differentials of workers and the second is unexplained and often attributed as discrimination. This study focuses on the unexplained gender wage gap in manufacturing sector of Pakistan with the objective to check the relevance of human capital model with comparable information and to find out the determinants of gender wage gap. By comparing LFS 2001-02 and 2010-11 the study sheds light on whether or not gender wage gap has reduced over time. The empirical findings of this study show that education level, technical training, urbanization and labour market experience are the most important determinants of the gender wage gap. The main cause of gender wage gap is discrimination against women. The results also confirm that discrimination has worsened in 2010-11in comparison with 2001-02.