Gender wage gaps in Ghana: A comparison across different selection models

Abstract

The wage of an individual is observed only when he/she is employed. However, getting employment requires two decisions. First, an individual has to decide to participate in the labour market, and second, an employer must decide to hire that individual. Since female labour market participation often differs from that of men, and employers’ decisions to hire may also be influenced by gender, it is appropriate to account for this double selection process. This study uses the latest household survey in Ghana to estimate gender wage gaps by correcting for this double selection process. We find that the average total gender wage gap is positive and significant irrespective of the sample selection correction method used. Our results indicate that women on average receive lower wages than men. Irrespective of the type of selection method used, our findings suggest that almost all the wage gap is a result of differences in returns, with only a small part coming from differences in observables. We find that the gender wage gap is smaller among formal wage employees and the gap decreases as education level increases. Although our findings indicate a similar trend in the wage gap across all specifications, the magnitude of the gap is sensitive to the choice of the model. This points to the need to be cautious about the choice of sample selection correction used to analyse gender wage gaps.

The welfare of Ghanaian women in trade: the role of English and French language literacy

“…The total earnings of women vary based on geographical locations and economic activities. Previous studies ascribe female earnings to be dependent on factors like physique, education level, cultural, political and social norms (Boahen and Opoku, 2021;Monga et al, 2019). The average hourly income for women in trade increased from GHS (Ghana cedis) 0.70 in 2005 to GHS 1.00 in 2012.…”

Are public sector workers in Ghana overpaid? Evidence from a Blinder-Oaxaca decomposition analysis.

“…In relation to gender wage gaps, Asia has the most significant share of gender wage literature in developing countries -whereas Africa has the least (Khalid 2017). Most African wage inequality studies reveal that historically, females have received lower wages than males (Appleton and Hoddinott 1999;Boahen and Opoku 2021;Bhorat and Goga 2013;Nordman and Wolff 2009;Ntuli and Kwenda 2020). Clearly, while wage inequality has been a concern for global development, not much empirical evidence has been gathered on the issue in Africa, compared to developed countries.…”

“…Previous studies on wage inequalities in Ghana have focused on understanding the effects of trade openness and skilled-bias technological change on wages (Görg et al 2001), the gender-wage gap in the manufacturing sector (Abegaz and Nene 2018), and on examining genderwage gaps using different selection models -correcting for double selection bias (Boahen and Opoku 2021). However, only one study has investigated the private-public wage gap in Ghana using the Blinder-Oaxaca decomposition method (Younger and Osei-Assibey 2017).…”