Wage inequality in international perspective. Effects of location, sector, and gender

This paper uses the well-known Oaxaca-Blinder decomposition technique to understand the determinants of wage-gaps between men and women, between urban and rural workers, and between those employed in the rural agricultural versus the rural non-agricultural sectors, for the 14 developing and transition economies in the RIGA-L dataset. The unexplained male-female wage gaps (i.e. the gaps that remain after controlling for a host of observable characteristics of the job and the worker) provide estimates of labor market discrimination against women that are consistent with prior estimates from other countries, and are generally similar in rural and urban areas. We argue that countries with large unexplained urban-rural gaps, such Tajikistan and Malawi, are those in which rural to urban migration is likely to persist even in face of high urban unemployment rates. Furthermore, we find that large unexplained wage gaps in favor of non-farm employment, versus paid labor in farming, exist in Tajikistan (53%), Ecuador (44%), Nepal (36%), Nicaragua (32%), and Nigeria (30%); these would then appear to be the countries for which a shift of existing workers, with their current attributes, from the farm to the non-farm sector would have the largest impact on rural incomes.