Melaku A., and Gibson N., (2023) ‘Gender wage and productivity gaps in the Ethiopian manufacturing sector’. Journal Of Applied Economics 26(1)
The authors commenced with explaining the impact of gender-based discrimination on employment and earning gaps between men and women in the Labour market. Ethiopia, as one of developing countries, has taken various steps towards women’s economic empowerment and gender equality. To mention some, reforms on higher educational institutions to close the gender gap, reforms on the Family Law and Land registration that aimed at improving women’s equal right in marriage, divorce, land ownership, paid employment, and other socio-economic aspects. Regardless of these efforts, women are still discriminated against when it comes to equal right to employment, income generation, political participation, and other social aspects.
The study used census based firm level manufacturing sector data that was collected by the Ethiopian Central Statistical Agency for the period of 1996-2010. The data covered all medium and large sizes, with at least ten workers. It is inclusive of all relevant information on production, wages, employment, and other characteristics. The Ethiopian manufacturing industry is growing at an alarming rate and becoming one of the sectors absorbing huge Labour forces. It accounts for 4.3% of the national output, grew at a rate of 12% per year and the total employment in 2014 is around 200,00. The sector is largely dominated by labour intensive production technologies that produce light manufacturing products. As a result, it hires large numbers of employees including women.
According to the findings of this study, there is a significant gender gap among the manufacturing industries. Firms with higher female employee shares pay lower than the average when compared with firms with higher male employment. Regarding wage, the study indicates that female workers are paid less than their level of productivity. Differences are also observed between globally connected firms and others with no international connections. Accordingly, globally connected firms provide equitable wages when compared with the other. Moreover, the level of skill of the employee determines the wage. Accordingly, women with higher levels of skill were found to be paid higher wages than women with lower levels of skill. However, such skill differential doesn’t influence the wage of male workers in the same situation.
Generally, the authors recommended that in the Ethiopian manufacturing industry, efforts shall be made to reduce gender pay gap. Such can be successful through skill development, training, vocational education of women and addressing segregation in the labour market. Moreover, alleviating institutional, cultural, and political hindrances against equitable pay will improve the current unequal treatment at a workplace.