Gender Earnings Differential In The Malaysian Manufacturing Sector
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Date
2018-03
Authors
Cheong, Jia Qi
Journal Title
Journal ISSN
Volume Title
Publisher
Universiti Sains Malaysia
Abstract
This study estimated the size of the male-female earnings differential in the
Malaysian manufacturing sector and further decomposed it into the part that is
explained by differences in endowments and the part that remains unexplained.
Further decomposition was done by education levels, ethnicity, marital status,
occupation groups, manufacturing subsectors, firm size, firm ownership and trade
union membership. The data used was drawn from the Second Productivity and
Investment Climate Survey (PICS II), 2006, conducted collaboratively by the World
Bank, the Malaysian Department of Statistics, and the Economic Planning Unit. The
male-female mean monthly earnings gap in the manufacturing sector was 0.2086 in
log points, which translates to 23.2 percent higher earnings for men. This is
substantially lower than the gap reported in 1991 by an earlier study. The twofold
decomposition indicated that the earnings difference due to unexplained factors—
traditionally attributed to discrimination, though it might be capturing the effects of
other unobservable traits— resulted in 28.3 percent higher mean monthly earnings
for men. The explained portion, due to differences endowments, favoured women
and helped narrow the earnings difference. The result of the threefold decomposition
was similar, although it captured a negligible interaction effect that was not
statistically significant. The findings showed 50 percent or more of the earnings gap
was due to unexplained factors, both in the case of the manufacturing sector, as a
whole, as well as in almost all the subsamples. The exceptions were in the case of
degree holders (in the subsample related to education) and Separated, Divorced and
Widowed group (in the subsample related to marital status).
Description
Keywords
Size of the male-female earnings differentia , in the Malaysian manufacturing sector