Has the Gender Wage Gap been Reduced during the 'Peruvian Growth Miracle?' A Distributional Approach

Between 2004 and 2014 the Peruvian economy experienced a noticeable growth which surpassed most of Latin American countries during that period, leading some to quote this episode as the Peruvian Growth Miracle. Yet, growth of wages would not have been accompanied by an equally marked reduction in wage differentials between men and women despite government efforts to address this issue. Consequently, this study analyzes and decomposes the gender wage gap in Peru for 2004 and 2014 using the Machado and Mata (2005) decomposition method correcting for sample selection bias in the context of quantile regression (Albrecht et al. 2009). This allows to decompose the differential in terms of the endowment and treatment effect at each point of the income distribution instead of, as has been customary in previous studies for Peru, only at the average of the distribution. Using data from the National Household Survey, we find that unconditional and conditional gaps, which favour men, have deepened between 2004 and 2014 at every point of the distribution, while there is evidence of sticky floors and glass ceilings in both years. Decompositions consistently reveal that, for both years, discrimination against women is the most important factor behind gender gaps at each percentile even though the effect of endowments plays in favor of those. All in all, this raise doubts about the aggregate effectiveness of pro-equity policies applied in recent years.

Keywords

Gender Wage Gap, Distributional Decomposition, Inequality, Peru, Quantile regressions

JEL Classification

C01, J08, J16, O12