Wage determination and gender discrimination in Uganda

Abstract

This study examines male-female wage determination and gender discrimination in Uganda. The study used the nationally representative household survey 2002/03 collected by Uganda Bureau of Statistics. Wages for both males and females were estimated by implementing a Heckman selection model. Heckman selection model was employed to correct for selectivity at the stage of entrance into the labour market. Estimations from the wage equations both for men and women with sample selection highlight the relevance of human capital, demographic factors and regional labour market segmentation in wage determination. The returns to education are all positive and significant for females and males. However the trend tends to favour females more than males. For instance, the earnings of female individual with secondary education rise more than 80% percent relative to one with primary education while the earnings of male individual with secondary education rise more than 70% relative to one with primary education. The difference is more pronounced when it comes to post secondary. It is noted that the earnings of individual female with post secondary education rise more than 170% compared to that of a male which rise by 136% relative to ones with secondary education. The regional dummies are associated with negative influence for wages, for both males and females. However, the returns seem to be significantly lower in Northern and Western regions relative to Central region for females, while those for males are significantly higher. Demographic characteristics such as being unmarried, age and residence account for varied wages for males and females. It was found out that male-female wage gap is about 39%. The results from the gender wage gap decomposition using Oaxaca (1973) and Neumark decomposition indicate larger wage differential attributed to discrimination and that the largest component of the unexplained wage gap stems from female disadvantage. The study recommends policies that reduce gender inequalities, particularly those policies that have a positive impact on the empowerment of women who suffer from discrimination like access to education, and work environment that encourage equal treatment in labour market.