Ethnic wage gaps in Peru: What drives the particular disadvantage of indigenous women?

Abstract

Ethnic inequality in labour market outcomes has long been on the policy agenda across Latin America. Using National Household Survey data, the authors analyse Peru's ethnic wage gap by sex over the period 2005-11. Although the gender wage gap is smaller than the ethnic gap, indigenous women compound both disadvantages. Interpreting the unexplained component of the gap as an upperlimit measure of ethnic discrimination, the authors then decompose the explained component into the discrete effects of individual, job and locational characteristics. Since more of the ethnic wage gap can be explained on these grounds among women, they conclude with targeted policy proposals.