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Formal but Less Equal. Gender Wage Gaps in Formal and Informal Jobs in Urban Brazil

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  • Ben Yahmed, Sarra

Abstract

In developing countries, a large share of employees work informally and are not covered by employment protection legislation. I study how gender inequality differs across formal and informal wage-earners in urban Brazil. The raw gender wage gap is about the same on average in informal jobs (5%) as in formal jobs (7%), but I show that this difference is the result of different male and female selection processes. First, female employees have better observable characteristics than male employees, for example in terms of educational attainment. After controlling for observable characteristics, the adjusted gender wage gap is on average about 24% among formal employees and about 20% among informal employees. Second, men and women entering formal and informal jobs have different unobservable characteristics. Controlling for endogenous selection into formal vs. informal jobs, I find that the gender gap in wage offers is high and increases with education in formal jobs. In informal jobs, however, estimated wage offers are the same for men and women. I discuss the potential implications of these findings regarding the effect of labor market regulation on gender wage gaps.

Suggested Citation

  • Ben Yahmed, Sarra, 2018. "Formal but Less Equal. Gender Wage Gaps in Formal and Informal Jobs in Urban Brazil," World Development, Elsevier, vol. 101(C), pages 73-87.
    • Handle: RePEc:eee:wdevel:v:101:y:2018:i:c:p:73-87
    DOI: 10.1016/j.worlddev.2017.08.012
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    Citations

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    Cited by:

    1. Chia Liu & Andrés F. Castro Torres & Ewa Batyra, 2022. "A gender story of social disengagement in Latin America," MPIDR Working Papers WP-2022-004, Max Planck Institute for Demographic Research, Rostock, Germany.
    2. Sarra Ben Yahmed & Pamela Bombarda, 2020. "Gender, Informal Employment and Trade Liberalization in Mexico," The World Bank Economic Review, World Bank, vol. 34(2), pages 259-283.
    3. Estefanía Galván, 2022. "Gender Identity and Quality of Employment," Economica, London School of Economics and Political Science, vol. 89(354), pages 409-436, April.
    4. Facundo Quiroga‐Martínez & Esteban Fernández‐Vázquez, 2021. "Education as a key to reduce spatial inequalities and informality in Argentinean regional labour markets," Regional Science Policy & Practice, Wiley Blackwell, vol. 13(1), pages 177-189, February.
    5. Richard Chisik & Julian Emami Namini, 2019. "International Trade And Labor‐Market Discrimination," Economic Inquiry, Western Economic Association International, vol. 57(1), pages 353-371, January.
    6. Conover Emily & Khamis Melanie & Pearlman Sarah, 2021. "Gender Imbalances and Labor Market Outcomes: Evidence from Large-Scale Mexican Migration," IZA Journal of Development and Migration, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 12(1), pages 1-22, January.
    7. Perova,Elizaveta & Reynolds,Sarah Anne & Schmutte,Ian, 2021. "Does the Gender Wage Gap Influence Intimate Partner Violence in Brazil ? Evidence from Administrative Health Data," Policy Research Working Paper Series 9656, The World Bank.
    8. Hansen, Henrik & Rand, John & Win, Ngu Wah, 2022. "The gender wage gap in Myanmar: Adding insult to injury?," Journal of Asian Economics, Elsevier, vol. 81(C).
    9. Mustafizur Rahman & Debapriya Bhattacharya & Md Al-Hasan, 2019. "Dimensions of Informality in Bangladesh Labour Market and the Consequent Wage Penalty," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 20(2), pages 224-247, September.
    10. Wong, Sara A., 2019. "Minimum wage impacts on wages and hours worked of low-income workers in Ecuador," World Development, Elsevier, vol. 116(C), pages 77-99.
    11. Almeida, Eloiza R.F. & Araújo, Veneziano & Gonçalves, Solange L., 2022. "Urban wage premium for women: evidence across the wage distribution," World Development, Elsevier, vol. 159(C).

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