Addressing the Gender Pay Gap in Ethiopia: How Crucial is the Quest for Education Parity?

This paper uses the 2005 Ethiopian Labour Force Survey to analyse the gender pay gap in Ethiopia. A particular attention is drawn on the relative importance of education parity to mitigate the most pressing wage inequality, together with the role of labour market segmentation. Decompositions of the gender wage gap are performed for different points in the wage distribution, different age cohorts and different types of wage employment. Our results indicate that while differences in education contribute to a non-negligible share of the gender wage gap, about half of the education wage gap can be explained by selection across job characteristics. The sources of the wage gap tend also to vary quite substantially across age groups, types of employment and wage levels. Finally, our results suggest that some form of discriminatory practices may contribute to the wage gap both directly through the unexplained component and indirectly through job selection.