The Gender Earnings Gap in Latin America and the Caribbean: An analysis of its components

This study analyzes gender earnings gap in 18 countries in Latin America and the Caribbean. It finds a significant difference in hourly earnings between men and women in most of the region. It also finds that while women should be earning more per hour than men based on their level of education, the economic sectors in which they work, their occupations, the setting in which they live (urban/rural), and their personal characteristics, they do not, in reality, earn more. The earnings gap favoring men is therefore due to factors that are not explained by the variables used in this study and are rather due to unobservable characteristics associated with discriminatory gender biases. These biases may be cognitive or rooted in poorly designed laws, discrimination, or labor costs related to child-rearing that are overlooked by society. This analysis uses data from the household surveys harmonized by the Inter-American Development Bank (IDB), and it uses two models to estimate the gender earnings gap: the Blinder-Oaxaca decomposition and the Nopo decomposition.