Gender Inequity: Older Workers and the Gender Labor Income Gap in Peru

Abstract

Using annual household surveys from 2004 to 2019, we examine the existence of a gender labor income gap among older persons in Peru. Two labor income models are estimated: Model 1 uses a basic set of demographic, socioeconomic, and personal characteristics as regressors (also called endowments); Model 2 uses the basic set plus additional personal characteristics. The Misner‐type relationship holds with positive returns for education and experience, and the anticipated association to the endowments. The Oaxaca‐Blinder decomposition yields an explained labor income gender gap of 44.4% (Model 1) and 51.5% (Model 2), i.e., controlling for endowments, approximately one half of the labor income difference remains unexplained and can be attributed to discrimination and labor segregation. In light of these results, we estimate Model 3 with two additional variables (head of household and beneficiary of intergenerational private transfer) which attempt to capture gendered stereotypes. With these two variables which provide information on gender discrimination the explained labor income gap for Model 3 is 71.1%—an increase of 19.6%. The unexplained component of the difference in labor income amounts to 28.8% that we attribute to unobserved variables that operate as post‐labor market elements in patriarchal societies. Results show that gender inequity during a woman’s life‐span manifests acutely among older women, which raises important implications for policy interventions.