Estimating Gender Wage Gap and Its Decomposition in Pakistan

The study estimates the gender wage gap and decomposes it into endowments and discrimination components by applying Nopo’s Non-Parametric decomposition procedure never used in Pakistan. For this purpose, the study uses Pakistan Social and Living Standard Measurement Survey data for the year 2013-14. The Non-Parametric procedure results reveal that there is a 19 % gender wage gap in Pakistan. Further, the decomposition technique shows that about 18 % of the total wage gap is due to discrimination in the labor market or unfavorable behavior against women, whereas only 1 % is due to individual characteristics. The policy implication is that the 25th Amendment of Pakistan’s Constitution “Equality of Citizen” should be implemented properly in letter and spirit to decrease discrimination in the labor market