Analyzing Gender Disparities and Wage Differentials: A Decadal Study of the Wage Distribution

Abstract

The gender wage gap worsens poverty and political decision-making regarding economically marginalized persons and indirectly benefits the wealthier sections. Increased poverty leads to premature death, violence, and crime, while reduced social security triggers unethical and illegal activities, leading to further injustices for both men and women. Sri Lanka has experienced the steepest decline in the Global Gender Gap Index rank to date, particularly from 2010–2020. This study investigates the trends in gender wage inequality during this decade. This study utilized microdata from the Sri Lanka Labor Force Surveys 2010 and 2020, obtained from the Sri Lanka Census and Statistics Department. The data was rigorously analyzed using STATA 15.0, employing pool regression and Chow tests for hypotheses testing and analyses. To ensure the validity of the results, ordinary least squares assumptions and endogeneity testing were conducted, and suitable modifications were made before using the data. Age, ethnicity, religion, education, work experience, and language literacy were the statistically significant determinants of gender wage inequality. The interactive dummy coefficient (time and gender) was -0.019, implying that the difference in hourly wage was reduced by 1.9%, although it was not statistically significant. This indicated that the gender wage gap was decreasing. The findings of this study, which reveal the trends in Sri Lanka’s gender wage inequality against the backdrop of significant shifts in its gender equality ranking, are of paramount importance. They can serve as a guide for addressing economic disparities, identifying discrepancies, promoting gender equality, and enhancing labor market efficiencies.