Decomposing Gender Wage Differentials Using Quantile Regression: Evidence from the Lebanese Banking Sector

Abstract

This paper investigates gender pay inequality in the labor market of a developing country. Our empirical investigation uses data derived from a sample of employees in the Lebanese banking sector for the years 2008 and 2014. Using Blinder-Oaxaca decomposition, the results reveal that the unexplained component of the gender wage gap, attributed to discrimination, represents a substantial share of the total gap. A surprising result is that the contribution of human capital to the gender wage gap is negative, suggesting that wage discrimination is the main explanation for the gap. Utilizing the Machado-Mata methodology to decompose the wage gap across the entire wage distribution, our findings indicate that the unexplained component of the raw gender wage gap is more pronounced at the low and middle ranges of the distribution. However, the explained component dominates at the top of the distribution, suggesting that earnings gaps are fully explained by observed characteristics.

This is a preview of subscription content, access via your institution.

Fig. 1

Notes

  1. 1.

    One issue when examining age-wage profiles is the potential correlation between age and experience (Luong and Hébert, 2009). Luong and Hébert note that the effect of age may also capture the effect of other related factors such as experience. In this case, older workers are likely to have more years of experience.

References

  1. Badel, A., & Peña, X. (2010). Decomposing the gender wage gap with sample selection adjustment: evidence from Colombia. Revista de Análisis Económico, 25(2), 169–191.

    Article  Google Scholar 

  2. Blinder, A. S. (1973). Wage discrimination: reduced form and structural estimates. Journal of Human Resources, 8(4), 436–455.

    Article  Google Scholar 

  3. Dah, M. A., Dah, A., & El-Kassar, A. (2009). Using logit regression to test the glass ceiling hypothesis: new evidence from the Lebanese banking sector. Journal of International Business and Economics, 9(1), 124–131.

    Google Scholar 

  4. Fakih, A., & Ghazalian, P. (2015). Female employment in MENA’s manufacturing sector: the implications of firm-related and national factors. Economic Change and Restructuring, 48(1), 37–69.

    Article  Google Scholar 

  5. Fang, T., Zikic, J., & Novicevic, M. M. (2009). Career success of immigrant professionals: stock and flow of their career capital. International Journal of Manpower, 30(5), 472–488.

    Article  Google Scholar 

  6. Fields, J., & Wolff, E. N. (1995). Interindustry wage differentials and the gender wage gap. Industrial and Labor Relations Review, 49(1), 105–120.

    Article  Google Scholar 

  7. Figueiredo, M. D. C., & Botelho, M. D. C. (2013). Decomposition of the gender wage gap in Portugal, 1998–2007: the evidence of gender discrimination. Portuguese Journal of Social Science, 12(3), 287–315.

    Article  Google Scholar 

  8. Guarini, G. (2013). An Econometric analysis of the gender pay gap in Italy among young adults. International Journal of Business Management and Economic Research, 4(5), 775–786.

    Google Scholar 

  9. Hegewisch, A., Williams, C., & Edwards, A. (2013). The gender wage gap: 2012 (No. C350). IWPR Fact Sheet. Institute for Women’s Policy Research. http://www.iwpr.org/publications/pubs/the-gender-wage-gap-2012. Accessed 19 July 2014

  10. Heinze, A. (2010). Beyond the mean gender wage gap: decomposition of differences in wage distributions using quantile regression (no. 10–043). ZEW Discussion Papers. Center for European Economic Research. http://ftp.zew.de/pub/zew-docs/dp/dp10043.pdf. Accessed 19 July 2014.

  11. International Labour Organization (ILO). (2012). Global employment trends 2012: Preventing a deeper jobs crisis (report no. 467984). International Labour Office, Economic and Labour Market Analysis Department. http://www.ilo.org/public/libdoc/ilo/P/09332/09332(2012).pdf. Accessed 19 July 2014.

  12. Johnson, R. W., & Neumark, D. (1997). Age discrimination, job separations, and employment status of older workers: evidence from self-reports. Journal of Human Resources, 32(4), 779–811.

    Article  Google Scholar 

  13. Jolliffe, D., & Campos, N. F. (2005). Does market liberalisation reduce gender discrimination? Econometric evidence from Hungary, 1986–1998. Labour Economics, 12(1), 1–22.

    Article  Google Scholar 

  14. Kandil, L. E. (2009). Gender wage discrimination in Egypt: A quantile regression analysis. Paris: Université Paris I Panthéon-Sorbonne. https://espe.conference-services.net/resources/321/1533/pdf/ESPE2009_0466_paper.pdf. Accessed 24 August 2014.

  15. Kecmanovic, M., & Barrett, G. F. (2011). The gender wage gap during Serbia’s transition. Comparative Economic Studies, 53(4), 695–720.

    Article  Google Scholar 

  16. Khitarishvili, T. (2009). Explaining the gender wage gap in Georgia (No. 577). The Levy Economics Institute. http://www.levyinstitute.org/pubs/wp_577.pdf. Accessed 24 August 2014.

  17. Kunze, A. (2008). Gender wage gap studies: consistency and decomposition. Empirical Economics, 35(1), 63–76.

    Article  Google Scholar 

  18. Luong, M., & Hébert, B. P. (2009). Age and earnings. Perspectives on Labour and Income, 10(1), 5–11.

    Google Scholar 

  19. Machado, J. A., & Mata, J. (2005). Counterfactual decomposition of changes in wage distributions using quantile regression. Journal of Applied Econometrics, 20(4), 445–465.

    Article  Google Scholar 

  20. Maume, D. J. (2006). Gender differences in taking vacation time. Work and Occupations, 33(2), 161–190.

    Article  Google Scholar 

  21. Murphy, K. M., & Welch, F. (1990). Empirical age-earnings profiles. Journal of Labor Economics, 8(2), 202–229.

    Article  Google Scholar 

  22. Ñopo, H. (2008). Matching as a tool to decompose wage gaps. The Review of Economics and Statistics, 90(2), 290–299.

    Article  Google Scholar 

  23. Oaxaca, R. (1973). Male-female wage differentials in urban labor markets. International Economic Review, 14(3), 693–709.

    Article  Google Scholar 

  24. Oaxaca, R. L., & Ransom, M. R. (1994). On discrimination and the decomposition of wage differentials. Journal of Econometrics, 61(1), 5–21.

    Article  Google Scholar 

  25. Obama, B. (2014). President Barack Obama’s State of the Union Address. Retrieved from http://www.whitehouse.gov/the-press-office/2014/01/28/president-barack-obamas-state-union-address. Accessed 25 August 2014

  26. O’Dorchai, S. (2008). Pay inequality in 25 European countries (No. 08–06.RS). DULBEA Working Papers. ULB – Universite Libre de Bruxelles. https://dipot.ulb.ac.be/dspace/bitstream/2013/8565/1/so-0006.pdf. Accessed 25 August 2014.

  27. Papapetrou, E. (2008). Evidence on gender wage differentials in Greece. Economic Change and Restructuring, 41(2), 155–166.

    Article  Google Scholar 

  28. Razavi, S. M., & Habibi, N. (2014). Decomposition of gender wage differentials in Iran: an empirical study based on household survey data. The Journal of Developing Areas, 48(2), 185–204.

    Article  Google Scholar 

  29. Reva, A., and Sulla, V. (2012). Gender inequality in the labor market in Serbia (Report No. 6008). Policy Research Working Paper. The World Bank. http://elibrary.worldbank.org/doi/pdf/10.1596/1813-9450-6008. Accessed 25 August 2014.

  30. Scicchitano, S. (2014). The gender wage gap among Spanish managers. International Journal of Manpower, 35(3), 327–344.

    Article  Google Scholar 

  31. The World Bank. (2011). Capabilities, opportunities and participation: Gender equality and development in the Middle East and North Africa Region (Report No. 66106). Quick Notes Series. The World Bank. https://openknowledge.worldbank.org/bitstream/hand... BLIC0.pdf?sequence=1. Accessed 26 August 2014.

Download references

Author information

Affiliations

Authors

Corresponding author

Correspondence to Ali Fakih.

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Dah, A., Fakih, A. Decomposing Gender Wage Differentials Using Quantile Regression: Evidence from the Lebanese Banking Sector. Int Adv Econ Res 22, 171–185 (2016). https://doi.org/10.1007/s11294-016-9574-z

Download citation

Keywords

  • Gender wage inequality
  • Wage decomposition
  • Quantile regression
  • Lebanon

JEL Codes

  • J16
  • J31
  • J71
  • C21