Gender wage and labour supply differences in Zambia: evidence from the school-to-work transition survey
Nsokolo, Denny S
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The transition from school to work is a critical phase in the lives of young people that has lasting effects on their entire life courses. There is lack of empirical work on gender wage and labour supply differences in Zambia, especially during the first few years spent by young workers in the labour market. This paper analysed data from the School-to-Work Transition Survey (SWTS), conducted by the International Labour Organization (ILO) in Zambia in 2014. The study seeks to explore the causes and the extent of the gender wage and labour supply gaps in the Zambian labour market among young people aged between 15-29 years. The study uses the Mincerian (1974) earnings equations to estimate the returns to human capital characteristics and the gender wage gap as a baseline framework. A decomposition approach of Oaxaca and Blinder (1973) that divides the wage differential into explained and unexplained components is also applied. To capture gender differences at different percentiles of the wage distribution, the study uses the Juhn, Murphy and Pierce (1993) decomposition. Further, the study implements the Yun (2004) decomposition technique to estimate gender differences in labour supply between men and women, the study also implements the Fairlie (2005) decomposition to establish how different covariates or determinants of labour supply affect women’s participation in the labour markets. The findings reveal significant wage gaps between young men and women in Zambia. A 28 per cent wage gap among those aged between 20-24 years is found and over 30 per cent in the prime age workers (25-29 years). Wage decomposition methods reveal that most of the wage gap appears to be at the lower and upper end of the wage distribution, among young adults (20-24 years) and the prime-age workers (25-29 years). The study also reveals significant gaps in labour supply in favour of men in all age groups, that is, 3 per cent in those aged between 15-19 years, 10 per cent in the older age group (20-24 years) and about 9 per cent in the 25-29 years age group. The study concludes that there is an existence of wage and labour supply gap between young men and women in Zambia in favour of men. The gaps are more pronounced in older age groups than in teenagers below the age of 20 years, indicating that wage and labour supply differences begin to emerge as young people begin to make decisions about family life and work. Results from the Oaxaca-Blinder decomposition and the Yun decomposition point towards the possibility of discrimination in the labour market, that is, the market hires and rewards men and women differently despite having similar human capital characteristics. Therefore, efforts to enforce adherence to existing policy on equal-pay-at work need to be strengthened.
The University of Zambia