Gender Wage Gap in Urban Nicaragua: Evidence from Decomposition Analysis
Abstract: This paper empirically investigates explanations to the gender wage gap in urban Nicaragua for 2005 and 2009. For this task, using data from the EMNV survey, we applied an Oaxaca-Blinder (1973) decomposition (standard and correcting for selection bias) of the mean wage and the novel Recentered Influence Function (RIF) regression method introduced by Firpo, Fortin, and Lemieux (2009) for the wage distribution. In this way, we explore in detail which factors influence the mean wage gap and the presence of a "sticky floor effect". The results show that the wage structure accounts for a large share of the differences in mean wages and across the distribution. We do not find evidence that selection bias affects this result for the mean. Moreover, we found a reduction in the wage gap and in discrimination during the period of study, especially at the lower and upper part of the distribution. We argue that the mean gap and the differences at the upper half are driven by taste-based discrimination outlined in Becker's (1971) view. In contrast, the sticky floor effect is driven by occupational segregation due to discrimination in commerce and service activities. Meanwhile, at the upper part of the distribution this effect appears in sales and clerical occupations.
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