The gender wage gap and occupational segregation in the Mexican labour market

This study examines the role of occupational segregation in explaining the gender wage gap in Mexico. Using census data and based on the Brown et al. (1980) decomposition, it is observed that male-female wage differentials increased between 2000 and 2010. For both years, within occupation wage differentials generally increased the gender wage gap, whereas between occupation wage differentials provided the opposite effect. Since within occupation wage differentials are driven by the unexplained component, the results suggest that the gender wage gap is primarily a product of differences in the average returns to productivity-related characteristics within occupations. Occupational segregation does not increase male-female wage differentials since women do not appear to encounter barriers into high paying occupations. This result is robust to the use of different levels of occupational aggregation and when correcting the wage equations for selectivity-bias.