Gender Wage Differentials in Mexico: A Distributional Approach

Abstract

SummaryThe paper examines the gender wage differentials in both the formal and the informal sectors of the economy, in Mexico from 1996 to 2006. To estimate and understand the gender wage gap, the paper considers the entire distribution of wages, taking into account the probability of employment into the wage sector. The main findings of the paper suggest that the gender wage gap differs by the sector of employment. Unlike the raw gender wage differentials, the selection-adjusted gender wage differentials are higher in the formal sector, relative to the informal sector. The unexplained gender wage gaps also vary by sector of employment with the unexplained component being higher in the formal sector relative to the informal sector. Although the average unexplained gender wage gap has decreased over time (from 1996 to 2006) in both sectors, there is some evidence of a glass ceiling in the formal sector, with the unexplained gender wage gap being higher in the upper tail.