ACSPRI Conferences, ACSPRI Social Science Methodology Conference 2014

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The Gender Wage Gap in Bangladesh: An application of Olsen and Walby simulation method

Nafisa Anjum, Anne Daly

Building: Holme Building
Room: Cullen Room
Date: 2014-12-10 09:00 AM – 10:30 AM
Last modified: 2014-11-26


This article examines the gender wage gap in the formal public and private sector in Bangladesh. The traditional Oaxaca method focuses on the explained and unexplained part of the wage gap; in this paper we use the Olsen and Walby (2004) simulation method that emphasises only the explained part of the wage gap. Using the most recent ‘Labour Force Survey 2005-06’, BBS (LFS 2005-06) data show formal sector female employees earn about 32.1 per cent less than their male counterparts. Using the Olsen and Walby (2004) simulation method for the first time in the Bangladeshi context, if the other characteristics of male and female employees were similar, ‘being female’ was sufficient to generate a significantly lower wage than males in the formal sector. If females are treated as males, without considering any other endowment increases, females could increase their income by 4095.3 taka1 per year. Results also indicate that not only endowments differences in human capital and work experience-related variables were important but discrimination appears to play a significant role in the total wage gap in the Bangladeshi formal sector labour market.

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