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Male–Female Wage Gap and Informal Employment in Bangladesh: A Quantile Regression Approach

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  • Mustafizur Rahman
  • Md. Al-Hasan

Abstract

This article undertakes an examination of Bangladesh’s latest available Quarterly Labour Force Survey 2015–2016 data to draw in-depth insights on gender wage gap and wage discrimination in Bangladesh labour market. The mean wage decomposition shows that on average a woman in Bangladesh earns 12.2 per cent lower wage than a man, and about half of the wage gap can be explained by labour market discrimination against women. Quantile counterfactual decomposition shows that women are subject to higher wage penalty at the lower deciles of the wage distribution with the wage gap varying between 8.3 per cent and 19.4 per cent at different deciles. We have found that at lower deciles, a significant part of the gender wage gap is on account of the relatively larger presence of informal employment. Conditional quantile estimates further reveal that formally employed female workers earn higher wage than their male counterparts at the first decile but suffer from wage penalty at the top deciles. JEL: C21, J31, J46, J70

Suggested Citation

  • Mustafizur Rahman & Md. Al-Hasan, 2019. "Male–Female Wage Gap and Informal Employment in Bangladesh: A Quantile Regression Approach," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 20(1), pages 106-123, March.
    • Handle: RePEc:sae:soueco:v:20:y:2019:i:1:p:106-123
    DOI: 10.1177/1391561418824477
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    Cited by:

    1. Muhammad Shahadat Hossain Siddiquee & Md. Saiful Islam & Md. Raied Arman, 2021. "Gender Earnings Gap among Urban Youth Adults in Bangladesh: A Comparative Static Analysis," Research in Applied Economics, Macrothink Institute, vol. 13(3), pages 45-66, September.
    2. Avinno Faruk, 2021. "Analysing the glass ceiling and sticky floor effects in Bangladesh: evidence, extent and elements," SN Business & Economics, Springer, vol. 1(9), pages 1-23, September.
    3. Mustafizur Rahman & Md. Al-Hasan, 2022. "The Reverse Gender Wage Gap in Bangladesh: Demystifying the Counterintuitive," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 65(4), pages 929-950, December.
    4. Khondaker Golam Moazzem & Tamim Ahmed, 2021. "Implications of COVID-19 for Bangladesh’s Graduation from the LDC Status," CPD Working Paper 140, Centre for Policy Dialogue (CPD).

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    More about this item

    Keywords

    Gender wage gap; Oaxaca–Blinder decomposition; quantile decomposition; informal employment; quantile regression;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J46 - Labor and Demographic Economics - - Particular Labor Markets - - - Informal Labor Market
    • J70 - Labor and Demographic Economics - - Labor Discrimination - - - General

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