Changes in Peru's Gender Earning Gap: An Analysis from 1997 to 2021

The gender earnings gap in labor earnings between men and women in Latin America is an obstacle to achieving gender equality and sustainable development. In Peru, the earnings gap persists despite showing a decreasing trend over time. Most of this gap is not explained by observable variables from household surveys, suggesting the presence of gender biases. Additionally, the gap is more significant among informal sector workers. There is also a heterogeneous earnings difference favoring men in most occupations. To analyze the gender earnings gap in labor earnings in Peru between 1997 and 2021, this study uses data from the National Household Survey (ENAHO), harmonized by the Inter-American Development Bank (IDB). Two methodologies are presented to estimate the gap: the Blinder-Oaxaca decomposition and the Ñopo decomposition. The analysis shows that while the total gap has reduced, as has happened in many other countries in the region, this reduction is generally associated with the explained gap rather than a reduction in the unexplained gap, which persists over time. This indicates that additional efforts are needed to understand the observed disparity.