Decomposition of the gender wage gap in Ecuador

Abstract

Objective: Estimate the components that determine the gender wage gap in the labor market of public and private employees in Ecuador. Methodology: We used the Blinder-Oaxaca (1973) decomposition method with correction for selection bias on the data from the Encuesta Nacional de Empleo, Desempleo y Subempleo (ENEMDU) for September 2020. Results: The gender wage gap is 35.6 percentage points. Women's endowments (schooling and work experience) contribute to reduce the gap while unobserved factors (discrimination) increase it. Recommendations: Public policy should be oriented towards combating discrimination to reduce gender inequality. Limitations and implications: More research should be focus on studying the determinants of gender discrimination. Originality: This paper provides evidence on gender wage inequality based on a decomposition method with correction for selection bias. Conclusions: We conclude that discrimination against women is the main cause of gender wage inequality in the Ecuadorian labor market.