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Gender Wage Gaps

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Wages are given as the price of labor for the work done by an individual, and the reward for the investment on the human capital of the worker. However, despite the rise in equal opportunity employers and feminist movements upholding equality in the workplace, there is still a large disparity in the wages received by workers based on one’s sex. Borjas (2005) stated that wage inequality can be explained by the difference in productivity of workers and the rate of return of skills. This wage inequality is manifested in the wage gap and is usually seen between sexes and among various races.

A vast number of empirical studies that focused on wage gaps between genders in the labor market have been conducted, however it is still unclear …show more content…

This method requires the linear regression estimation of earning equations of men and women. Based on these earning equations, counterfactual wage is generated, which is the difference in the average wage between men and women. This difference is classified into two components: one is attributable to the difference in the average characteristics of the individuals, and the other is attributable to the difference in the average rewards that these characteristics have. The second component reflects the effects of thee unobservable gender differences in characteristics and the discrimination in the labor market. However, even this method is commonly used; it has been widely criticized in literature because of its interpretation of the unexplained part of the wage gap as the result of discrimination. It was identified that issues such as omission of variables, pre-labor market discrimination, and endogeneity can arise in using ordered least square estimation of wage regression which can result to difficulties in distinguishing the different components of the wage gap and in assigning the true part of the gap that is due to discrimination (Djurdjevic and Radyakin, …show more content…

Hence, the Philippine government is challenged to increase employment growth, to reduce vulnerable unemployment, and to improve decent work opportunities. To achieve these, the government should have adequate and appropriate legislation, and active labor market support. Gender differences in the supports can certainly reflect a form of pre-labor market discrimination because women face some barriers to entry in the labor market. With this, it is important to take into account the role of the gender differences in the supports because it may be significant for legislations aimed at reducing the wage gap between men and women.

The general objective of the study was to determine gender wage gap in the Philippines. To be able to do this, the study specifically aimed to (1) identify the gender differences in the supports; (2) estimate the gender wage gap using the simple matching method by Ñopo and (3) examine to which extent the observable characteristics can explain the gender wage gap.

The structure of this paper is organized as follows: Chapter II reviews related studies on measuring wage gap. Chapter III shows the economic theory and framework behind the study. Chapter IV identifies the data and the methodology used in the study. Chapter V presents the results and discussion, and the implications of the

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