Trends in Gender Wage Gap and Discrimination in South Africa: A Comparative Analysis across Races

Abstract

This study investigates the existence of gender wage gaps across races in South Africa using dummy variables in the augmented Mincerian equation. Having found evidence of gender wage gap, the study then utilizes the Oaxaca–Blinder decomposition technique to identify the proportion of the gap in wages that is attributable to pure discrimination between males and females. Lastly, the Juhn–Murphy–Pierce (JMP) method is used to understand the change in wage gap over the period 2001–2007. The results indicate that females continued to earn significantly less than males in the period 2001–2007. The findings of the study indicate that gender discrimination continues to exist, but the gender wage gap has decreased in the period of study mostly because of an improvement in the observed and unobserved characteristics of females in relation to males. However, a race-wise analysis indicates that the narrowing of the wage gap is not uniform across the races. The wage gap has, in fact, gone up for many races with the increase in discrimination coming up as the major reason for it.