The conventional human capital earnings function is applied to a rich set of Malaysian wage data in an attempt to determine the origins of sex differences in average earnings. Several findings are of interest, the first being that the relationships estimated from the earnings function are similar to those typically reported for non‐LDCs. Second, less than a third of the average monthly wage difference between the sexes of about 34 per cent appears to be the consequence of either females having lower (measured) productivity than males, or females receiving lower rates of return to human capital than males. The major part of the earnings difference is apparently a consequence of employment distributions: females are much more likely to be in the low‐paying occupations.