One of the main caveats of Pakistan’s economic development history is the
persistence of gender inequality with respect to almost all socioeconomic indicators. For
instance, Pakistan ranks 66, out of 75 countries, with respect to the Gender
Empowerment Measure (Human Development Report, 2006) with a GEM value of 0.377,
largely a manifestation of very low estimated female to male earned income ratio, which
is a depressing 0.29. GEM and other labour force statistics confirm the gender gap in
labour force participation. One of the possible explanations of this gender gap is gender
discrimination in the labour market, particularly in wages.
Evidence with respect to gender discrimination in Pakistan’s labour market is well- documented. Siddique, et al. (2006), Nasir and Nazli (2000), Siddique, et al. (1998) and
Ashraf and Ashraf (1993) all confirm that men earn higher wages than women even after
controlling for measurable characteristics affecting their productivity. These studies, however, analyse the gender wage gap by comparing the mean male/female wage. Studies which compare the gender wage gap at different points along the wage
distribution are not available for Pakistan.
This study aims to examine the evolution of the gender pay gap for the wage
employed in Pakistan over the period covering 1996-97 to 2005-06. The primary
objective of the current paper is to provide some clearer insights on the impact of the
recent economic development on the gender pay gap. The contribution of the current
paper, however, compared to previous research, is two-fold. First, our analysis covers a
longer time period, almost a decade, given our use of data drawn from the Labour Force
Survey at two distinct points in time: from LFS 1996-97, and then, after almost a decade, in 2005-06. Secondly, in contrast to the mean regression approach, we enhance the
analysis by using a quantile regression approach [Albrecht, et al. (2003)], that allows us
to explore the gender pay gap at selected points of the conditional wage distribution. This
study provides the estimates of the temporal decomposition of the gender pay gap using
both the mean and the quantile regression approach [Pham and Barry (2006)], which
provides quantile measures of the gender wage at two specific points in time, 1997 and
2006, using respective Labour Force Surveys for each of these years. The analysis is
further disaggregated by occupation, and province.The paper is organised as follows: Section II presents the literature review, including both the existing empirical evidence with regard to the gender wage gap in
Pakistan, and also some international evidence on the pattern followed by the gender
wage gap across the wage distribution, and the glass ceiling effect. Section III discusses
the methodology; Section IV describes the dataset and provides descriptive statistics
which inform us of especial features of female participation in the Pakistani labour
market, including employment and wage ratio. Section V is a summary of the statistical
findings of our analysis, while Section VI concludes by discussing the relevant policy
implications