International Research Journal of Finance and Economics ISSN 1450-2887 Issue 55 (2010) EuroJournals Publishing, Inc. 2010 http://www.eurojournals.com/finance.

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Determinants of Gender Based Wage Discrimination in Pakistan: A Confirmatory Factor Analysis Approach
Ghulam Yasin Department of Sociology, Bahauddin Zakariya University, Multan (Pakistan) Muhammad Ishaque Fani Department of Pakistan Studies, Bahauddin Zakariya University, Multan (Pakistan) E-mail: fanibzu@gmail.com Asif Yaseen Department of Commerce, Bahauddin Zakariya University, Multan, (Pakistan) Abstract This paper is an empirical study of the development of labour market participation and wage differentials between males and females in Pakistan between 1999 and 2008. There is little known about the position of women in the labour market of Pakistan. The purpose of this paper is to investigate the gender based wages differences in Pakistan by knowing the individual and socio-cultural factors. This has been done by the application of regression models and earning estimations on the panel data taken from Pakistan Labour Force Survey for analyzing factors responsible for gender based wages discrimination. This study employs Oaxaca & Blinder decompositions to measure the effects of wages discrimination. Mincer earning function is used to estimate the earning equations for males and females and confirmatory analysis approach exhibits that the adverse treatment of female labour market participation is the largest identifiable reason why the wage gap is in the same type of paid employment and it further emanates differences in remunerations. The empirical findings indicate that individual factors particularly education and labour market experience are the most important determinants as evident from the decreasing gap of wage differentials for higher level of education, while organizational factors are assumed constant for this research. This is concluded that gap is increasing with the passage of time and causes and extent of gender based wages discrimination in Pakistans labour market is multi-folded. The Government should understand its implications as a major impediment to resolve unemployment in Pakistan and also discriminatory practices in Pakistan.

Introduction
Unemployment in the developed countries in general and in the developing countries in particular has been a major cause of economic instability and has significantly retarded the growth and development of such countries. The consequences of unemployment are adverse and lead to social and economic disaster. It is imperative to overcome unemployment, taking it as an important barrier in the economic expansion of the country. Promotion of the employment sector not only has a considerable positive impact on the overall structure of national economy but strengthens the social institutions as well. Over the last six decades, a series of polices have been made to address the issue of unemployment in Pakistan. Promoting labour intensive technique through implementation of the policies pertaining to tax exemptions and facilitating the medium and small industries in the country

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has been one of the key factors to overcome this problem but the issue still remains as intense as ever. Employment of the labour has never been entirely free of gender discrimination if viewed and analyzed in the perspective of such policies. These policies designed with a clear manifestation of the gender discrimination for the labour employment is though a matter of major concern but there are a lot of other cultural, social and economic constraints upon the female labour force as well. The socio-cultural constraints and such polices together have a profound impact on the labour market of Pakistan and have greatly promoted the issue of gender discrimination. As mentioned earlier, most of the strategies intended for the economic growth and stability in the country, are based on the promotion of export. The export industries strongly believe in the employment of skilled or highly skilled labour force. Owing to a number of socio-cultural constraints, a vast majority of the female labour force is not acquainted up with the new technology and inadequate or no vocational training results in their inability to meet the present day demands of the labour market. This phenomenon has supported a sense of hostility against the female labour force in the industries. On top of that, the meagre wages, as an incentive offered to the female labour has been a major obstacle which considerably reduces its active participation in the main stream of country's workforce. According to Human Development Report (1998), in almost all the societies, relative to men, women are concentrated in low-paying jobs, generally overrepresented in clerical, sales and service occupations, often work longer hours and much of their work remains undervalued, unrecognized and unappreciated. It is still an unequal world. The research literature on gender based wage discrimination has indeed swelled enormously over the past few years with numerous researchers administering the various models across the world. Interestingly, the conceptualization, measurement and application of different instruments across government and commercial setting are not bereft of the controversies either. A careful examination divulges that the factors and the corresponding items are comprehensive as it appears. The current research work strives to bring to light some of the critical determinants of gender wages discrimination that has been overlooked in the literature and proposes a comprehensive model and an instrument framework for measuring gender based wages discrimination to identify and decompose the factors, which influence the wage structure of the female labour force and encourage gender bias in the labour market.

Significance of the Study

Women though have acquired a great degree of skill pertaining to work and have participated actively in various professions at all levels, however, wage discrimination predominantly discourages them to play a significant role to strengthen national economy. According to Human Development Report (1998), in almost all the societies, relative to men, women are concentrated in low-paying jobs, generally overrepresented in clerical, sales and service occupations, often work longer hours and much of their work remains undervalued, unrecognized and unappreciated. It is still an unequal world. Differences in male-female earning structures has been a subject of discussion since long and economists have attempted to analyze these issues over a long period of time. One of the most dominant explanations of these differences is given by Becker (1962) and Mincer (1962), the human capital theorists who emphasized the role of schooling, training and other productivity-related factors in bridging up this gap. In another study, Bergman (1974) presented the crowding model suggesting that the employer decides to hire a woman into an occupation and the employers rational decision may be a discriminatory one, if he uses only a persons sex to disqualify her from an occupation. Mincer and Polachek (1974) emphasized on the deterioration of womens human capital during periods of intermittency due to child-bearing. Polachek (1981) hypothesized that it is due to these interruptions that women enter into those occupations where cost of interruption is low. Conversely, England (1982) has demonstrated that a woman who plans to enter into an intermittent labour market would not gain an advantage by choosing a traditional female occupation.

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A sufficient literature is available concerning the issue of gender based wage discrimination all over the world. A number of experts discussed a variety of issues concerning, the labour market discrimination, the female managers and their wages in especially in the Central Europe and wage patterns in Segmented Labour Markets (Cain, 1986; Jurajda and Teodora,2006; Taubman and Michael,1986). Others studies reported the theoretical and empirical work on the gender discrimination related to the corporate sector (Babcock and Laschever, 2003; Baker and Murphy, 1988; Becker,1985; Bell, 2005; Bertrand and Hallock, 2001; Black et.al.,2004; Blau and Ferber,1987; Bonin et.al.,1993: Gneezy et.al. 2003) Little research has been carried out on male-female earning differences in developing countries, however, the available data focused upon some significant aspects of the problem coving a wider part of the developing world e.g. the case South Asian economies, Nepal, and the third world were explained by various authors (Bardhan and Kalpana,1994; Acharya and Bennett,1982; Assenmacher,1990). Similarly, the gender discrimination for various labour markets of the under developed world was extensively described by several authors covering Brazil, Bangla Desh, Africa, Philippine, Dominican Republic and South Africa and South Asia (Birdsall and Behrman,1991; Chaudhuri, 1991; Collier, 1994; Folbre, 1984: Finlay,1989: Geisler 1993; Greenhalgh, 1985). The condition of female labour force in relation to transitional economies in the Indian sub-continent was illustrated by Ibraz (1993) and Barry (1997) for Pakistan while Kalpagam, (1986) and Mathur, (1994) detailed the wage implication for India. Ashraf and Ashraf (1993a, 1993b) conducted studies directly relating to these issues but a number of attributes potentially linked to earning differentials in Pakistan were unavailable. This research focuses on some aspects of wage determination and evaluates a number of possible reasons of wage discrimination, using Labour Force Survey 2007-08 for nine self-representing cities of Pakistan. This study is also an attempt to understand and suggest measures to bridge up the existing gaps concerning gender based wage differences in Pakistan. A variety of hypotheses have been tested applying Oaxaca (1973) and Blinder (1973) standard decompositions and incorporating occupational attainment model suggested by Brown et. al., (1980) to ascertain the extent to which the wage offers are sensitive to productivity-related factors and the extent to which it is because of discrimination. To expand the study, this discriminatory component is further decomposed to analyze the extent to which discrimination is due to lower positions in the same occupation. This study is an attempt to analyze quantitatively the extent of gender bias in the labour market of Pakistan. Important questions which are addressed in the course of study are: (i) What is the nature of gender discrimination that prevails in the labour market? Is labour market biased or neutral? (ii) How are the factors in the labour market related to the productivity of the female labour force? To what extent, decomposition explains them? (iii) Is female labour force offered low paid occupations?

Hypotheses Formulation
Gender inequality may be an indicator of implied unfair treatment due to different sexes. This can exist in education, access to work, work processes and work outcomes (Tomaskovic-Devey, 1993). Extenuating this opinion of gender differences at work, different theoretical perspectives attribute apparent disparity to disparity in some other fields. This can be explained as human capital theory suggests gender difference in education is a result of difference in work experiences (Becker, 1993; Tomaskovic-Devey,1993). Social Theory explains differential involvement in work is an index of role assumed by different sexes (Tomaskovic-Devey,1993). The significance of gender discrimination in terms of participation and wage differentials depends on the substantiation of the following hypotheses concerning inequality

International Research Journal of Finance and Economics - Issue 55 (2010) Hypothesis 1 A female is less productive than a male after controlling human capital and social roles.

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Hypothesis 2 A female is less likely considered than a male to work for a paid job after controlling human capital and social roles. Hypothesis 3 A female has lower earning than has a male after controlling human capital and social roles. These hypotheses have been tested by applying Oaxaca (1973) and Blinder (1973) standard decompositions and incorporating occupational attainment model suggested by Brown et. al., (1980) to ascertain the following matters, 1. The extent to which the wage offers are sensitive to productivity-related factors and the extent to which it is because of discrimination in Pakistan. 2. The extent to which discrimination is due to lower positions in the same occupation and this discriminatory component has been further decomposed to expand the study in Pakistan.

Methods
The empirical analysis employs the cross sectional data from the Labour Force Survey (LFS), 2007-08, conducted by the Federal Bureau of Statistics. We have also used different issues of statistical year book of Pakistan and also reports of Ministry of Production and Ministry of Industries for making variables data comparable for confirmatory analysis, only those variables which has the same definition in all these reports have been used for this confirmatory analysis. This survey covers 18,912 households and more than 100,000 individuals of all urban and rural areas of the four provinces of Pakistan. The entire sample of household has been drawn from 1347 primary sampling units out of which 660 are urban and 687 are rural. The entire samples of households in Punjab are 8816 whereas 3096 are from urban and 5120 are from rural areas. The data for this study is restricted to eight selfrepresenting cities of Pakistan including Lahore, Multan, Faisalabad, Sialkot, Rawalpindi, Gujranwala, Bahawalpur and Sargodha. The reason for this restriction is that we have comparatively rich information on wages in these cities. Total sample size for these cities is 19,714 in which 10379 are males and 9335 are females. Furthermore, the data for present study are further confined to those individual, aged between 14-65 years, for whom wages were reported and for whom we could obtain occupations. It, in turn reduced our sample size to 3584 individuals, of which 3252 were males and 332 were females, including only paid employees who worked in public or private sector and received remuneration in terms of wages, salary, commission, tips, piece rate or pay in kind. Of our total sample, 91 percent are males and 9 percent are females. The categorization of the data by occupations reveals that out of 7 occupations, almost 34 percent males are concentrated into production sector, while 37 percent females are confined to lower level white collar jobs such as clerks. At the same time, women are under-represented in professional, administration, sales and agriculture sectors. However, our data set for females are not large enough to produce reliable estimates of proportion of females in each occupation. So the biases may result from poor measurement of this variable.

Variables
Monthly Earnings It is defined to include earnings and bonuses of workers evaluated on monthly basis. This variable has positively skewed score in the distribution so the dependent variable used throughout the analysis was

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the natural logarithm of monthly earnings that would be appropriate for analysis to eliminate bias due to skewed distribution. The explanatory variables included in the analysis are human capital, marital status, regional variables and occupational status. The detailed description is as follows, 1. Human Capital variables: These can be classified as follows, (i) Schooling In our study, this variable is measured as years of schooling completed. It is expected that its coefficient will be positively related to earnings through its positive impact on productivity. (ii) Experience and Experience Square To capture workers post-school investment in human capital through on-the-job training or learning by doing, we have constructed a potential work experience measure as a residual from current age, completed years of schooling and six. It is assumed here that schooling starts at the age of six. (iii) Schooling-Experience Interaction In order to assess that more educated is more able and would get more on-the-job training, we include schooling-experience interaction. It would be expected that this interaction term will be steeper for more educated individual than for less educated. (iv) Technical Education Human capital theory also suggests that the more trained individual is the more productive and hence the coefficient associated with it would be positively related to earnings. 2. Marital Status It affects labour force participation of males and females differently and hence their earnings. Married women have a large amount of time which is spent out of the labour force in order to bear and raise children. However, married males and never-married females would be more motivated as compared to married females and never-married males similarly widows and divorced females have more incentive to increase their productivity and earnings. 3. Regional Variables We have included nine self-representing cities of Pakistan to control the cost of living differences, opportunities for education and job differences, labour market differences and other possible differences among different regions of the country. It can be anticipated that there will be higher earnings for the resident of Karachi and Lahore as composed to those living in other cities. 4. Occupational Status There are many studies in which differences in occupations contributed to the differences in earnings. It is argued that women may be concentrated in relatively low paying occupations or in low paying positions as compared to men. It could be due to both individual characteristics and possibility of discrimination.

The Model
In order to identify and decompose the factors, which influence the wage structure of the female labour force and foster gender bias in the labour market, we have used Mincer earnings function as its starting point lnwi =ai +xii +ui In the first place, the study uses regression analysis with maximum likelihood estimation to analyze gender participation in paid work. For this we, have applied Oaxaca and Blinders (1973) decomposition technique that requires separate estimation of the wage equation for men and women. ln wm ln w f = m (x m x f) + [(am a f) + x f ( m f)] As Oaxaca and Blinders (1973) decomposition model does not take into account the wage structure so we have used wage gap decomposition developed by Juhn et al. (1991). The average gender wage gap for country a can be written as follow: D = ln w ln w = (x x) + ( ) = x +

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The gender wage gap is hence decomposed in a part due to human capital differences (x) between men and women and another part due to differences in the ranking of men and women in the male residual distribution (if women are located at the top or the bottom of the male wage residual distribution). This last element can reflect either the gender differences in terms of unobserved characteristics or the impact of the discrimination against women on the labour market. Jones (1983) has shown that the discrimination term in the Oaxaca decomposition cannot be decomposed in order to identify the contribution of each price to this term. This is due to the use of dummy variables in the wage equation. In order to observe the mediating and moderating effect of occupational variables, we have used the approach of Brown, Moon and Zoloth (1980) decomposition technique. The estimation of separate wage equations by gender and the mean characteristics give the following decomposition:
n j =1
n j =1 n

n j =1
n j =1

1nwm 1nw f = p jf ( x m x jf ) jm + 1nw jm ( p m p jf ) j j

+ p jf x jf ( jm jf ) + 1nw jm ( p jf p jf ) + p f (a m a jf ) j
j =1

Where p measures the predicted share of women in the jth occupation according to the model of male predicting occupational distribution. In this model the gender wage gap is decomposition into five elements: (i) gender differences in individual characteristics, (ii) differences in occupational segregation between men and the simulated womens distribution (due to differences in gender productivity characteristics), (iii) differences in the return of these characteristics, (iv) differences in occupational segregation between the simulated womens distribution and the womens actual distribution (residual), (iv) differences in unobserved characteristics between men and women and their prices. The second and fourth elements of this decomposition are obtained by estimating a reduced form multinomial logit model of occupational attainments for men. The probability of a male worker i being in the jth occupation is a function of worker characteristics, z: exp( z im y m ) j m pij = n exp( z im y m ) j
j =1

f j

The estimate of this model predicts p jf the proportion of women that would be in each occupation if women were allocated between occupations according to the male occupation attainment model. This approach supposes that in a world without discrimination, women would be distributed across occupations according to the male occupational mechanism. This is also important to consider that all discrimination studies make an implicit assumption as to what earnings would be in the absence of discrimination. This is called the non-discriminatory market structure. It is important that the assumed non-discriminatory wage structure is as realistic as possible. Second, assuming a model which explicitly estimates current total earnings in the economy, allows confirmatory analysis to isolate the development of macroeconomic changes in the Wage Gap. Brown at al. (1980) showed that their decomposition is a particular case of the Oaxaca decomposition where the gender differences in occupational distribution are taken as exogenous and therefore, part of the explained component. In the Brown et al, decomposition this part is further decomposed into an explained component and a residual component. Finally, in order to evaluate the differences in the earning structures of males and females, the statistical earning function by Mincer (1974) is augmented by other factors earnings of the individuals.

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So, we have adopted expanded methods for decompositions to distinguish between the factors affecting individuals characteristics and discrimination. This can be modelled as follows,
L W - L W = Pk ( k
k M F F M

- k ) + Pk
k

X k ( k - k ) (WD)

(I) + P F k (X
k M k

-X

F k

) M k + W
k

M k

(P M k P F k ) (QD)

(PD)

+W
k

M k

(P F k Pk )
F

(OD) Brown et.al. (1980) defined (I) and (WD) as unjustified differences in intra-occupation wages, (PD) as the justifiable intra-occupation wage differential, with (QD) and (OD) as the justifiable and unjustifiable portions of the interoccupation wage differentials, respectively. The terms included in the decomposition are defined below: W and W ) = The grand mean wages for males and females.
M F

Pk and Pk the observed proportion of males and females in occupation k. , and X = The regression coefficients and mean characteristics respectively are now given
k k

for the kth occupation and superscripts M and F still refer to males and females. W M k = mean wages for males in occupation k.
F

P k = the hypothetical proportion of females in the sample who would be in occupation k if females faced the same occupational allocation mechanism as males.

Final Model Specification

The exact specification of the earning function which is adopted in this study for estimation is given below, dropping the individual subscripts and sex superscripts: LNWAGE= 0 + 1 SCH + 2 EXP + 3 EXPSQ + 4 EXPSCH + 5 TECHEDU

+ 6 MAR + 7 WID + 8 DIV + 9 PROF + 10 ADMN + 11 CLER + 12 SALE + 13 SERV + 14 AGRI + 15 LAH + 16 FAS + 17 RAW + 18 MUL + 19 GUJ + 20 SIA + 21 BAH
Note: The definition of variables is given in Appendix-1

Analytic Procedure
This analysis was completed into three steps to examine the mediating and moderating effects involving interactive variables. First, we studied gender based differences in its standard form. Second, we introduced a set of predictors of explanatory variables of human capital and social roles and analyzed the result of this intervention for gender differences. Third, we introduced the term gender with regional variables and occupational status. In the logistic regression analysis, odds ratios and partial correlations represented the effects estimated and the pseudo-R 2 represented the goodness of fit (Norusis, 1994; Veall and Zimmermann, 1991). The methodological approach, which we have adopted, allows for variation, both in wages and occupational distribution resulting from differences in productivity related factors, demographic factor, and occupational attainments. Oaxaca (1973) and Blinder (1973) decomposition analysis was used to

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investigate the pattern of earning structures responsible for personal characteristics of the individual and the discriminatory factors. Furthermore, a multinomial logit model hypothesized the occupational distribution of females that would exist if they faced the same structure of occupational determination as males. Consequently, we decomposed the overall wage differential into justifiable and unjustifiable portions attributable to productivity differences and occupational differences.
Table 1: Distribution of the Sample across Categorical Variables
Males (%) 91 13.3 4.4 12.1 6 21.3 29.9 4 10.3 80.7 29.4 59.2 1.9 0.4 34.2 16.7 7.6 8.6 7.2 8.6 2.1 5.1 Females (%) 9 1.3 0.4 1.2 0.6 2.1 3 0.4 1 8 2.9 5.9 0.2 0.1 3.4 1.7 0.8 2.7 0.7 0.9 0.2 0.5

Variables Total Sample (%) Gender 100 Occupations Prof 14.6 Admin 4.8 Clerks 13.3 Sale 6.6 Services 23.4 Prod 32.9 Agri 4.4 Technical Education Trained 11.3 Untrained 88.7 Marital Status Unmarried 32.3 Married 65.1 Widow 2.1 Divorced 0.5 Cities Lahore 37.6 Faisalabad 18.4 Rawalpindi 8.4 Multan 11.3 Gujranwala 7.9 Sialkot 9.5 Bahawalpur 2.3 Sargodha 5.6 Source: Labour Force Survey, Various Issues upto 2008

This table-1 shows only 1% females have attained technical education while males have very high percentage (10.30%). Marital data status suggests that the percentage of married male workers (59.2 percent) is greater than the percentage of married female workers (5.9 percent). The percentage of unmarried, widowed and divorced females workers is also less than that of their respective male counterparts. The distribution of our sample in terms of cities indicates that the largest proportion of the sample, about 37.6 percent came from Lahore city, with 34.2 percent and 3.4 percent males and females respectively. Faisalabad and Multan have the second and third largest proportions of the sample (18.4 percent and 11.3 percent respectively while the samples from Bahawalpur and Sargodha are very unrepresentative having only 2.3 percent and 5.6 percent of the total sample, respectively.

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Table 2:

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Descriptive Statistics for Non-categorical Variablesa (Means and Standard Deviation)b
Variables Females 7.6 1.3 32.96 11.4 8.8 3.1 17.9 6.5 519.7 161.3 103.5 33.5 .44 .1 .90 .3 1.87 .7

Total Sample Males 7.7 7.8 Lnwage 1.7 1.8 33.5 33.6 Age 11.2 11.6 8.4 8.1 Sch 4.2 4.1 19.6 19.2 Exp 8.3 7.0 549.5 552.1 Expsq 164.3 168.7 125.8 128.3 Expsch 34.5 44.0 .6 .62 Child0-6 .2 .3 .95 .95 Child6-14 .4 .4 2.45 2.51 Malpres .8 .7 Bold values represent the mean and italic values represent the Standard Deviation Source: Labour Force Survey, Various Issues upto 2008 a For definitions of variables, see Appendix-1

Table-2 reveals the natural logarithm of monthly earnings that is dependent variable. This table also details out among other features of female workers on average females are younger by 1 year having obtained 1 more year of schooling, having almost 2 fewer years of experience than their male counterparts.
Table 3: Mean Values of Log Monthly Earnings (By Occupation and Gender)
Males 5.6 6.8 6.6 6.8 6.9 6.3 6.6 Females 7.0 5.5 5.2 7.1 6.1 6.1 7.0

Variables Total Sample Prof 5.7 Admin 6.8 Clerks 6.4 Sale 7.0 Services 6.2 Prod 6.3 Agri 6.7 Source: Labour Force Survey, 2007-2008

Table-3 lists the mean values of log monthly earnings for seven occupation groups. From the tabulations, it is revealed that the production sector gives the highest mean log wages to males, approximately 6.9 (Rs. 995), where it is already indicated in Table-1 that males are highly concentrated in production sector. On the other hand, Table-3 showed mean log wages to females around 5.2 (Rs. 182).While Table-1 provides evidences that most of the females are concentrated into this sector.

Empirical Analysis Results

Using the standard method for decomposition, the earning differential is decomposed for the full-scale wage equation in Table-4 and for personal characteristics wage equation in Table- 5. The results presented in these two tables show that endowments count even less (approximately zero) and discrimination differential for even more (Table-4). Table-4 reveals that the first column of the differential except experience males does not have an advantage in schooling, experience-squared and

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technical education. It was confirmed by negative coefficients on these variables. It shows that females earn 6.83 percent more than males in case of non-discrimination. With respect to the differences in coefficients, Table-4 shows that experience, technical education, occupations and cities are the main sources of discrimination accounted for 131.4 percent discrimination. When we do not control for occupations, our decomposition in Table-5 shows 153.70 percent discrimination implies that the estimated effects of discrimination are larger than those reported in Table-5 so it may be that the main way in which women are discriminated is by occupational segregation or within-occupation discrimination.
Table-4: Decomposition Analysis from Full-Scale Wage Equation
Variable Sch Exp Expsq Expch Tech Marital Status Occupational Cities Total Male Female Earnings Differentials Due to Endowments Due to Returns to Explanatory Variables Intercept Differential Total Differential due to Discrimination Overall Earning Differential (Difference in log earnings) Difference in Endowments Difference in Coefficients
F X ( M F )

(X
M

X )

-0.06 0.08 -0.01 -0.02 -0.001 0.01 -.03 -.001 -0.032 -0.01 0.20 -0.05 0.14 0.13

-0.04 0.11 -0.001 -0.01 0.00 -0.06 0.03 0.20 0.229 -6.8% 131.4% -24.4% 106.8% 100%

Table-5:

Decomposition Analysis from Personal Wage Equation

Variable Difference in Endowments Difference in Coefficients
M F

M (X
Sch Exp Expsq Expch Tech Marital Status Cities Total Male Female Earnings Differentials Due to Endowments Due to Returns to Explanatory Variables Intercept Differential Total Differential due to Discrimination Overall Earning Differential (Difference in log earnings) Notes: A + sign indicates an advantage for males, A -sign indicates an advantage for females

X )

X ( M F )
0.01 0.14 -0.02 -0.02 -0.01 -0.07 0.23 0.25 (-7.17%) (153.70%) (-46.42%) (107.17%) (100%)

-0.06 0.08 -0.01 -0.02 -0.01 0.01 -0.01 -0.010 -0.01 0.25 -0.10 0.14 0.138

Further, the estimated results from multinomial logit model are presented separately for males and females in Table-6 and Table-7 respectively. In the logistic regression production is taken as comparison group, against which each other group is compared. Among males group, a highly educated individual is more likely to obtain a job in the professional, administration, clerical or

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agriculture sector, relative to attaining a job in production sector. Those who have more experience are more likely to work in the professional group, but experience variables do not show any significance in deciding entry into other occupations. The more technical education an individual has, the more likely it is that he will work in production sector as compared to professional, service or agricultural groups. Marital status does not seem to make any difference to the occupational attainment decision making of an individual. The results for the dummy variables for the cities suggest that residents from Lahore, Gujranwala, Sialkot, Multan and Faisalabad are more likely to work in sale, service and agriculture sector as compared to entry into production sector. The greater the number of children between zero to six in the family, the greater is the probability to opt for production sector relative to professionals, administration or clerks. The higher the number of males in a home, the higher is the probability that an individual will be in sales group, but it decreases the probability for entering into agriculture sector relative to production group.
Table -6: Results of the Multinomial Logit Occupational

Attainment Model (For Males Only) Dependent Variable = Prob (ones occupational attainment)
Variable Constant Sch Exp Tech Marital Status Mar Wid Div Child 0-6 Child 6-14 Malpres Cities Lah Fai Raw Mul Guj Sia Bah Sample Size Pscudo R2 Prof -3.58*** (-10.5) 0.196*** (15.7) 0.02*** (4.7) -0.68*** (-3.54) -0.05 (-0.4) 0.11 (0.28) 0.02 (0.02) -0.10* (-1.56) 0.032 (0.67) 0.01 (0.08) 0.03 (0.07) -0.04 (-0.3) 0.16 (0.8) -0.014 (-0.08) 0.19 (0.75) 0.83** (2.11) -0.05 (-0.1) 480 0.07 Admin -2.92*** (-6.0) 0.98*** (5.9) 0.01 (0.7) 0.69*** (2.86) 0.09 (0.6) 0.70 (1.1) --0.19** (-1.9) 0.043 (0.60) -0.07 (-1.11) -0.40 (-1.5) 0.29 (1.12) 0.49 (1.43) -0.47 (-1.06) 0.56 (-1.7) 0.88 (1.6) -0.23 (-0.61) 158 Cler -1.69 (-1.6) 0.08*** (6.8) 0.01 (1.4) 0.01 (0.01) -0.03 (-0.6) -0.20 (-0.20) -0.27 (-0.20) -0.05** (-2.11) 0.07 (1.5) 0.008 (0.23) -0.68*** (-2.8) -0.27 (-1.43) -0.39 (-1.4) 0.10 (-0.62) 0.26 (1.06) 0.13 (0.50) -0.23 (-1.08) 355 Sale -2.71*** (5.6) 0.0026 (0.02) 0.001 (0.14) 0.17 (1.20) -0.059 (-0.5) 0.08 (0.04) --0.01 (-0.07) 0.08 (1.2) 0.076* (1.56) 1.04** (2.19) 1.06** (2.10) 1.05* (1.8) 1.08** (2.10) 1.05** (2.1) 1.42** (2.12) 1.05* (1.9) 221 Serv -0.76*** (-2.9) -0.05*** (-6.6) -0.004 (-0.8) -0.52*** (-3.61) 0.08 (1.2) -0.77 (-1.5) 0.07 (0.1) -0.06 (-1.2) 0.01 (0.4) 0.0020 (0.2) 0.69*** (3.2) 0.54** (2.29) 0.32 (1.24) 1.06 (1.46) 1.7*** (6.4) 1.01*** (2.9) 1.56*** (6.1) 790 Agri -3.76*** (-4.2) 0.08*** (3.4) 0.002 (1.1) -0.58** (-2.00) -0.30 (-1.2) -0.78 (-0.7) --0.09 (-0.73) -0.001 (-0.00) -0.07** (-2.29) 1.05** (2.09) 1.48** (1.91) 1.12 (1.3) 0.80 (1.4) 2.39*** (2.7) 2.07** (2.01) 1.88** (2.5) 128

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Notes: Numbers with * are statistically significant at the 10 percent level, with ** at the 5 percent level and *** at the 1 percent level, two tailed test. Numbers in parentheses are z-values. Unmarried, Production sector and Sargodha city are reference categories.

Table-7:

Results of the Multinomial Logit Occupational

Attainment Model (For Females Only) Dependent Variable = Prob (ones occupational attainment)
Variable Constant Prof -1.73 (1.3) 0.036*** (2.67) 0.03 (1.05) -1.9 (-1.50) -0.10 (-0.04) ---0.01 (-0.31) 0.07 (0.25) -0.17 (-1.31) -0.01 (-0.51) -0.05 (-0.32) -0.42 (-0.39) ----Admin -24.23*** (-15.5) 0.02 (-0.31) 0.06 (1.50) -Cler -4.93*** (3.5) 0.27*** (6.95) 0.01 (0.8) -1.6*** (-2.82) 0.02 (0.06) -0.47 (-0.65) -1.5934 (-1.02) 0.19 (0.89) -.1938 (-1.03) -0.03 (-1.05) 1.01 (1.33) 0.75 (0.67) 0.49 (0.37) 2.44** (2.10) 3.73 (1.39) -0.07 (0.07) 121 Sale -23.33*** (7.4) -0.06 (-1.05) 0.02*** (3.45 -Serv -19.37*** (-6.87) -.088*** (-2.61) .043* (1.71 -Agri --

Sch Exp Tech Marital Status Mar Wid Div Child 0-6 Child 6-14 Malpres Cities Lah Fai Raw Mul Guj Sia Bah

0.12*** (4.5) 0.06** (2.10 0.38 (-0.61) 0.03 (0.61) ---0.19 (-0.38) 0.07 (0.3) -.11 (-0.81) 20.58*** (17.9) 21.01*** (17.01) 20.02*** (14.6) ---20.36*** (2.90) 25

-0.80 (0.7) -1.75 (1.02) 0.14 (0.11) -0.34 (-0.6) -0.16 (-0.19) -0.35 (-1.3) 24.16*** (17.82) -22.74*** (12.92) -----

-1.48 (-1.35) -1.25 (-0.84) -0.07 (0.5) 0.62** (-2.51) -0.68*** (-2.61) 22.24*** (7.3) 23.66*** (8.01) 22.01*** (6.98) 22.38*** (6.98) --21.88*** (7.42) 23

0.04 (0.15) -0.15 (-0.16) -0.1998 (-0.09) -0.13 (-0.94) -0.02 (-0.11) -0.12 (-1.2) 19.34*** (7.2) 19.04*** (7.0) 18.73*** (6.85) 20.11*** (7.32) --18.56*** (6.99) 41

Sample Size 22 15 Pseudo R2 0.27 Notes: Numbers with * are statistically significant at the 10 percent level, with ** at the 5 percent level and *** at the 1 percent level, two tailed test. Numbers in parentheses are z-values. Unmarried, Production sector and Sargodha city are reference categories.

Moreover, a woman from Lahore will choose administration sale, service or agriculture sector relative to production while a woman from Faisalabad and Rawalpindi is more likely to enter into sales, service and agricultural sector. The occupational attainment pattern is almost same for males and females. The coefficient estimates obtained from the males multinomial logit model are used to predict the hypothetical distribution of females in each occupation.

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Table-8 shows females actual occupational distribution, females hypothetical distribution and males actual distribution. Hypothetical distribution is estimated to see the difference of their occupational attainment if females are facing the same structure of occupations as men. This table also shows that the proportion of females will increase in professionals and administration by considerable size. And in production, service and clerical group, their proportion will be decreased. As compared to males, their proportion in professional and administration jobs will increase which implies that more females will be in high paying jobs. The final section provides us with the comprehensive picture if male-female earning differentials incorporate occupational attainment. To estimate the extended version of decomposition, we have estimated separate earning equation for each sex-occupational group. A summary of these results is presented in Table-9.
Table-8: Occupational Distribution
Females Hypothetical Distribution Value % 0.12 23.11 0.04 14.66 0.17 27.59 0.08 8.45 0.04 4.77 0.00 11.00 0.16 25.65

Males Actual Females Distribution Distribution Value % Value % Prof 0.04 13.3 0.06 1.3 Admn 0.04 4.4 0.03 0.4 Cler 0.01 12.1 0.27 1.2 Sale 0.06 6.0 0.06 0.6 Serv 0.13 21.3 0.03 2.1 Prod 0.23 29.9 0.15 3 Agri 0.03 4.0 0.07 0.4 Source: Calculation of first two columns is based on the observations from the data. Calculations of third column are based on the estimated results reported in Table-6.

Occupation

Discussion
This paper explains that gender discrimination in participation and wages exist in Pakistan. As a result, all hypotheses receive consistent support to strengthen the claim of gender discrimination in participation and wage differentials. The factors of human capital might be more significant than sex for predicting a working person's earnings. Status composition, marital status and occupation selection also receive support in various steps of analysis. However, the thesis of homogeneity and bargaining exert no significant effect on earnings. Although marital status and childrearing roles particularly reduced a female's access to a paid job and earnings, education if acquired showed the opposite effects for the female. The findings also show that gender discrimination might apply only for women who were married and responsible for childrearing. Likelihood to work and self-selection sufficiently mediate gender difference in earnings. Education and marital status are the most important background characteristics to predict earnings and work participation respectively. They also reflect the effect of human capital and social roles. According to human capital and social role theories, women committed to their families would acquire less skill for work (Eagly 1987; Mincer 1993). Other findings are also supportive of structural explanation of individual's earnings that depends on characteristics and choice of the occupation. This is evident that though female participation is improved yet male participation is increased faster. The net effect is in favour of males (see the difference between Row 4 & Row 5). Establishing the reason for wage gap changes can have important policy ramifications. A significant reduction in the wage gap is attributed to the unexplained part of the earnings estimates (Row 6). So this makes sense that market is offering better wages to females than their counterparts over a period of time. Participation estimates convey a far less favourable picture regarding the relative female position. Overall participation changes increased the wage gap considerably. Explained participation propensity changes favoured males considerably, while unexplained changes were favoured them a lot less. This implies whatever it is that makes females observably worse participants than males (one must look at

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the participation variables. Finally, changes in macroeconomic conditions introduced by changes in the non-discriminatory wage structure (Row 7) have worked in favour of females between 1999 and 2008. Given the limited extent of female employment rate in Pakistan, this is noticed that macroeconomic changes are working in the right direction regarding participation and the wage gap.

Confirmatory Factors Based Wage Gap decompositions Scenario

Total Wage Gap change 1999-2008 Participation stage estimates 1. Changes in unexplained participation 2. Changes in unexplained indirect participation 3. Changes in explained indirect participation Total Wage Gap change due to participation Earnings stage estimates 4. Changes in male productivity 5. Changes in female productivity 6. Changes in unexplained earnings 7. Changes in the non-discriminatory wage structure Total Wage Gap change due to earnings estimates 0.0579 0.1204 -0.0865 0.0792 0.1080 0.1021 -0.0649 -0.0510 -0.0572 -0.0823

Furthermore, the results point out that when occupational dummies were not included in the analysis, the discriminatory component of the total differential increased from 130.12 percent to 151.72 percent. Thus, the way in which occupation was incorporated into the model significantly affected the discriminatory component. A separate model of occupational attainment was used to predict the probability of attaining a certain occupation, and we were enabled to calculate a comprehensive decomposition analysis allowing for within-occupation and occupational segregation in the overall wage differential. The results of decomposition analysis showed that unjustified differences withinoccupational and accounted for 62.29 percent while occupational segregation showed 34.28 percent unjustified differences in gender wage gap. The results also manifest that women in Pakistan are not different in their productivity-related endowment from men and if there is no discrimination, women earn more as compared to men. Thus, dissimilarity in attainment of jobs is a remarkable phenomenon between males and females in Pakistan. It could be both due to differences in employers preferences toward women and due to a lack of product-market competition. If the labour market does not have only limited traditional occupations for women, it will reduce the degree of gender occupational segregation. Finally, within occupation, discrimination could be reduced by applying the law equal pay for equal work.

Policy Suggestions
i. Gender Mainstreaming The advancement of gender equality is manifested in womens participation in decision making, transformations in institutions and organizational cultures, and collective actions to rectify the gendered practices especially in employment and labour market of Pakistan. ii. Balanced Development Gender discrimination does not just affect the participation and earnings; it has many other dimensions as well. Without access to essential infrastructure and services, women will lack human and social capital to participate in the process of earning or job market. Women may be barred from developing their capabilities because of social or cultural restrictions. Such restrictions limit their geographical mobility, entrance in the job market and make it difficult for them to attend school or seek technical training. Gender discrimination in all its dimensions is declining in most countries of Asia and the Pacific but it is more widespread and serious in Pakistan and particularly in rural areas than in urban

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areas and also wide disparities between regions within the country. Government policies that leave the allocation of resources to the market and that invest scarce resources in places with the best growth potential will benefit some segment of the labour force. Owing to the inadequate communication and social networks, female labour force is disadvantaged when it comes to organization and the articulation of needs, priorities and preferences through economic processes. This area needs immediate attention of Government of Pakistan for tapping the potential of females in improved fashion.

iii. Gender Bias and Reducing Discrimination Government of Pakistan has been failed to recognize the gender bias which prevails in the social and economic sectors of Pakistan. Government should take institutional measures to look at the development of the both genders separately rather than viewing them as closely related. Government should provide education and training to female labour force. Attempts to develop the female labour force are not very significant. A lot of exploitation of female labour force can be seen in many sectors. Better infrastructure, provision of education and training opportunities can improve the present condition of this segment of the labour force. iv. Investing in education The knowledge-based economy is a dynamic call of today. This requires government willingness and attention to introduce required changes in the curriculum and changes in the attitude and the mindset of every member of the community. These changes will affect the professionals and later the industrial workers in the economy; they will eventually have an impact on female population of the economy. All will face new and rapidly changing technologies that they will have to use in their daily lives and in whatever sector they are working in to add more value to their products. Investment in education will be necessary to enhance the competitiveness of the countries.

Further Proposed Study

1. In Pakistan like all other developing countries, Socio-economic research perspective is needed to explore issues pertaining to individuals psychological processes, predisposition and preference. This further study would comprehend issues regarding deliberate choice of disadvantaged position of target population. For example, a married educated women might prefer child raising rather doing job so in this case her low involvement and earnings may not indicate gender discrimination in the labour market. So further research is needed to identify and analyze factors such as preference, expectation and perception of deprivation and discrimination (Crosby, 1982). 2. All kind of gender discrimination studies assume static relationship among selected variables but variables may change from time to time so further research is required to identify dynamic causal processes leading to employment and earnings. Along with cross-sectional studies, longitudinal studies are required to ascertain reciprocal relationships between earnings and their predictors, including education, marital status, the type of family, and number of children, is possible. 3. Another proposed area for research is that all existing models overemphasize on individual characteristics such as education and consider organizational characteristics such as nature of job, hierarchical position and departmental location either constant or ignoring them completely. But this is widely seen that discriminate policy is also ensued while assigning job positions to different genders so the conventional models do not take into account the complete extent of wages discrimination across genders.

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Appendix-1
SCH = years of schooling completed EXP = experience: AGE-SCH-6 EXPSQ = experience square TECHEDU = one if worker received technical education, zero otherwise. MAR = one if individual is married, zero otherwise. WID = one if individual is widowed, zero otherwise. DIV = one if individual is divorced, zero otherwise. (Unmarried individuals are reference category) PROF = one if individual is a professional, zero otherwise. ADMN = one if individual is an administrator/ manager, zero otherwise. CLER = one if individual is clerk or related worker, zero otherwise. SALE = one if individual is a sales or related worker, zero otherwise. SERV = one if individual is a services worker, zero otherwise. AGRI = one if individual is an agricultural worker, zero otherwise. (Production workers are reference category) LAH = one if individual is lives in Lahore, zero otherwise. FAS = one if individual lives in Faisalabad, zero otherwise. RAW = one if individual lives in Rawalpindi, zero otherwise. MUL = one if individual lives in Multan, zero otherwise. GUJ = one if individual lives in Gujranwala, zero otherwise. SIA = one if individual lives in Sialkot, zero otherwise. BAH = one if individual lives in Bahawalpur, zero otherwise. (Sargodha is a reference category) OLS method is used to estimate the regression coefficient.

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