This paper presents an overview of gender and ethnic wage gaps in the 18 Latin American countries. To formally asses the extent to which these differences correspond to differences in characteristics, the wage gaps are decomposed using a matching comparisons methodology as a non-parametric alternative to the Blinder-Oaxaca (BO) decomposition. The methodology pursued emphasizes the role of the differences in the supports of the distributions of observable characteristics. The failure to recognize those differences has been found to upwardly bias the estimates of unexplained differences in pay under the traditional BO setup.

After controlling for different sets of observable characteristics, we find that men earn between 9% and 27% more than the average female, with high cross-country heterogeneity. The unexplained pay gap is higher among the older, informal, self-employed and those workers in small firms. Ethnic wage differences are found to be larger than those along the gender dimension (between 25% and 40% of average minorities’ wages). Educational attainment differentials play an important role at explaining the gap. In contrast with the gender dimension, higher ethnic wage gaps are found among males, single-income generators at home, in rural areas and full-time workers. An important share of the ethnic wage gap is due minorities’ failure to reach high-paid positions.