Inter-Industry Gender Wage Differentials In Kenya

Abstract

In developed countries, the gap between male and female pay has been reducing significantly due to legislations and regulations making it more equalised in certain professions. However, globally, the gap is widening, and even where the gap is reducing, it is very slow. Using the World Bank's (2013) Skills Towards Employability and Productivity Survey (2013), this study seeks to examine inter-industry gender wage differentials in Kenya by adopting the (Fields & Wolff, 1995) and (Horrace & Oaxaca, 2001) to capture inter-industry male-female pay variations. The results of the inter-industry gender wage differentials reveal that even after accounting for personal characteristics, pay differences between male and female workers across the industries (except in the agriculture, fishery, and mining sector) women still receive less pay than men. In the commerce and trade sector, men’s wages were 27.2% higher than that of women and based on counterfactual analysis their earnings would increase by 17.5% if women’s had the same characteristics as men. In the services sector men earned 28.5% higher than women and that women’s wages would increase by 22.0% if women’s had the same characteristics as men. In the manufacturing and construction sector, men earned 23.1% more than women and based on counterfactual analysis their earnings would increase by 18.4% if they had the same characteristics as men. Admittedly, we find evidence of gender penalty in Kenya’s labour market as there exists inter-industry gender wage differentials explained less by the observable characteristics; age, marital status, experience, tenure, education, profession, and sector of employment.