Gender Wage Gap in Iran: Urban Areas

In the recent years, females’ literacy rate has experienced a drastic improvement in Iran; accordingly a remarkable increase in their participation rate is reasonably expected. Education is considered as one of driving forces of females’ presence in the labor market; however they are likely to be paid less than men in some occupations or activities. This phenomenon is called gender wage gap in the labor market literature. This wage gap occurs when a worker is paid less than her counterpart with the same level of marginal product. This study provides quantitative estimates of the gender gap in the labor market of Iran. To this end, using data on household income and expenditure, from 2005 through 2011, and applying the Oaxaca (1973) and Blinder (1973) wage decomposition, the wage differential between men and women that cannot be explained by human capital characteristics, is estimated as an indicator of gender wage discrimination. The results reveal the existense of the gender wage discrimination in the labor market of Iran, but its magnitude in professional job groups is less than low skilled jobs. Furthermore, the wage differentials in the private sector are much higher than the public sector.