The Gender-based Disparity in Labor Income across Latin America and the Caribbean

This document analyzes the gender gap in labor income in 18 countries of Latin America and the Caribbean. It is observed that there is a significant income gap in hourly income between men and women in most of the countries of the region. The study finds that women should have higher hourly earnings than men, considering their educational level, the sectors of the economy in which they work, the occupations they perform, the area in which they live and their personal characteristics. This means that the difference in income, which exists in the region in favor of men, is due to factors that are not explained by the variables used in the study, but by unobservable characteristics related to gender biases (commonly known as discrimination) that are manifested in inadequate legislation, cognitive biases, discrimination or labor costs related to child care that are not visible in society. For the analysis, the Household Surveys harmonized by the Inter-American Development Bank (IDB) are used as inputs, and two models are presented to estimate the labor income gap, the Blinder-Oaxaca and Nopo decompositions.