Investigating the Gender Wage Gap in the Nigerian Labour Market: A Distributional Approach

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Nwosu, Emmanuel O.
Orji, Anthony Orji
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African Economic Research Consortium
This study investigates the gender wage gap in Nigeria by extending the focus of the existing literature in two ways. First, we apply an extension of the Oaxaca-Blinder decomposition that relies on recentred influence function (RIF) regressions to analyze the gender wage gap at all points along the wage distribution. Second, we investigate changes in the gender wage gap between 2003/2004 and 2018/2019. The results unambiguously show that there is a significant gender wage gap in favour of men in Nigeria. This gap is statistically significant at all points of the wage distribution. Over time, we find that most of the wage difference is significantly accounted for by the wage structure effect, while the composition effect accounted for the wage gap at the lower end of the wage distribution during 2018/19. We also found a general decline in the gender wage gap along the entire wage distribution. In 2018/19, the gap is bigger at the bottom than at the top of the wage distribution, which is evidence in favour of a sticky floor in the Nigerian labour market. In terms of the contributions of individual covariates, we found that urban residence, unionization, education, public sector employment, and wage employment in agriculture has a significant reducing effect on the wage gap in favour of women. To address the gender wage gap in Nigeria, policy should focus more on ways to improve human capital among women and ensuring women are not segregated in top positions at the workplace.