Occupational Segregation and Earnings Differentials by Sex: Evidence from India

Female labour is on average, rewarded less than male labour in any labour market. The important sources of male-female earnings differences are the differences in occupational distribution and unequal pay for equal work. Most studies on the estimation of wage differentials concentrate either on occupational segregations or on the issue unequal treatment. This paper refines and synthesizes these two approaches, using a multinomial logit analysis and the econometric decomposition technique. Earnings are estimated as a function of productivity measures for each sexes, with sample selectivity correction. The gross earnings differences between sexes is then decomposed into a part that can be attributed to differences in human capital endowments and a part due to unexplained factors called discrimination, using a nationwide sample af science graduates in India. The findings suggest that discrimination accounts for almost two-thirds of gross earnings difference, with Wage Discrimination (WD) being considerably more pronounced than Job Discrimination (JD). Further, selectivity bias is found to be more important for a number of occupational categories.