Wage Discrimination in Uruguay (1991-1997)

Abstract

The purpose of this paper is to study the evolution, during the nineties, of the wage differential between men and women, and in particular the labor market discrimination. We try to analyze if in a frame of increasing openness to international trade, decreasing inflation, wage negotiation decentralization and increasing wage inequality, the labor market discrimination against women has experimented any change. We estimate the total wage differential and decompose it in three components: I) men advantage or overpayment due to the existence of discrimination (favoritism), ii) women disadvantage (pure discrimination) and iii) differences due to different human capital levels and labor insertion. It is observed that the wage gap between men and women diminished. Although the three factors go in the same way to improve women condition in the labor market, it is the differences due to different human capital levels and labor insertion the main factor that contributed to narrow the wage gap during the period of study (1991-1997). The decomposition of the wage gap shows that the men start the period with an advantage in terms of human capital and labor insertion that soon disappears and stars to be favorable for women, being the main factor that explains the diminishing in the wage gap. Not only the advantage of men but also the disadvantage of women had very moderate changes thus in a frame of wage gap diminishing, at the end of the period, they remained as the main explanation of the wage gap.