Is there pay discrimination between men and women?

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Responsible researcher: Silvio da Rosa Paula

Article title:  GENDER WAGE GAPS AND WORKER MOBILITY: EVIDENCE FROM THE GARMENT SECTOR IN BANGLADESH

Article authors: Andreas Menzel and Christopher Woodruff

Location of intervention: Bangladesh

Sample Size: Administrative records of over 80,000 workers from 70 large apparel export factories

Big theme: Gender

Intervention Type: Gender Pay Gap Assessment

Variable of Main Interest: Gender pay gaps

Evaluation method: Experimental Evaluation (RCT)

Assessment Context

Most of the literature on the gender pay gap is based on data for high-income countries. Evidence for developing countries is very sparse, largely due to a lack of quality data. Given this reality, this study addresses the issue of gender pay gaps, using the administrative records of more than 80,000 workers from 70 large export factories in the Bangladeshi garment sector, for the period 2012 to 2017.

The apparel sector in Bangladesh is the largest manufacturing sector, accounting for 80% of the country's exports and about 12% of GDP. The sector's 4,000 factories employ 4 million workers, more than half of them women. With annual growth of around 15% over more than two decades, the apparel sector has dramatically increased the proportion of women working full-time paid jobs.

However, there is widespread criticism of export manufacturers for failing to safeguard labor and environmental standards. The size of the sector in the country exploits the comparative advantage in cheap unskilled labor and its employment of large numbers of female workers, making this environment particularly suitable for studying broader social effects of interest, such as the wage gap.

Methodology Details

In order to assess gender pay gaps, researchers used a standard fixed-effect panel data approach, using a binary variable to identify whether the worker is male or female. Panel data allows workers to be monitored over time, in order to better capture their behavior over the years and control unobservable characteristics through fixed effects, such as determination, effort, motivation, characteristics that are difficult to achieve. measurement. In general terms, using this method, researchers seek to identify a causal relationship between gender and salary return.

Intervention Details

To carry out this study, data from monthly payroll records and skills assessments conducted by the factories' industrial engineering departments were used. Payroll data covers all workers employed by factories for at least one day. In general, in factories workers are classified into 7 levels, with level (7) being the lowest, assigned to unskilled workers, beginners called entry-level helpers. From level (3), workers are considered highly qualified operators. At higher levels (1) and (2), there are higher-level supervisory personnel and line supervisors, respectively. Due to limitations, the estimations only contain operators from levels (6) to (3), randomly selected from certain production lines. It is important to note that Bangladesh's minimum wage law for the garment sector prescribes a minimum wage for each level of worker, although workers at a given level generally receive slightly more than the respective minimum wage.

In the context of skills information, in some factories regular assessments of operator skills are carried out. In this way, using information from 20 factories, researchers create metrics to map workers' production capacity, providing more precise control of their productivity. Finally, in addition to salary records and skill measurements, data from a sample of sewing machine operators randomly selected in each of the factories were also used, covering a total of 2,607 workers.

Results

The results found indicate that women's salaries are on average 20% lower than men's, and even within a restricted set of occupations, men receive on average around 8% more than women. Furthermore, the data shows four very clear patterns. First, women are paid less than men, even though they have similar skills. Second, for both men and women, a considerable part of wage gains is associated with movements between factories. Third, women have shorter careers in the sector and lower rates of mobility between factories, although this does not appear to be related to marital status or pregnancy, or a lack of employment options outside the garment sector. Fourth, women also have lower promotion rates, for example, only 32% of women reach one of the two highest operator levels, while this percentage is 57% for men.

In general terms, the results indicate that men's longer careers in the sector explain around half of the wage gap, with the other half due to differences in internal promotions and mobility between factories. Furthermore, the study shows that married men pursue their careers more proactively. These results are consistent with gender norms that broadly affect women's bargaining position or labor market access reported in other research. For Bertrand et al . (2015), women can reduce their careers so as not to earn more than their spouses. In the study by Macchiavello et al . (2016), researchers report the existence of negative beliefs that women are less capable supervisors. In Glover et al . (2017), minority French supermarket employees reduce effort when working under biased managers. Such patterns, and the presence of women in less than 7% of supervisor positions in the apparel sector, may signal that efforts to advance in one's career generate lower returns for women, thus reducing their professional ambitions.

Public Policy Lessons

Gender parity is fundamental to prosperous economies and societies. Taking into account that women represent half of the world's population, developing and deploying these talents available around the world has a huge influence on the growth, innovation and competitiveness of economies and companies.

In Brazil, despite article 7 of the Federal Constitution guaranteeing equality of wages between genders, age, color or marital status, a study carried out by the Brazilian Institute of Geography and Statistics (IBGE) in 2019 showed that women earn less than men. men in all occupations selected in the research, only varying in intensity between occupations. Even with a drop in wage inequality between 2012 and 2018, female workers earn, on average, 20.5% less than men in the country.

Furthermore, a study that is part of the 2019 World Economic Forum (WEF) report, prepared with 153 countries, shows that Brazil occupies 130th position in the ranking that analyzes salary equality between men and women with similar work, this demonstrates that the Brazil still has a long way to go.

Reference

MENZEL, Andreas; WOODRUFF, Christopher. Gender wage gaps and worker mobility: Evidence from the garment sector in Bangladesh. National Bureau of Economic Research, 2019.