Education, Skills, and Labor Market Outcomes by Gender:

Evidence from Pakistan

ByGeeta Kingdon

Måns Söderbom

Introduction• Pakistan is an international outlier in gender gaps in education

• Far from narrowing, gender gap in primary enrolment rose by 30 points 1985-95, superseding even Afghanistan where gap rose by 18 points over same period [1].

• While somewhat narrowed, the gender gap remains very high

• Raises the Q: why girls’ educational outcomes are so inferior to boys’

• One plausible explanation – among others – is if girls face much lower economic incentives for acquiring education than boys

• We test this potential explanation using PIHS 1998-99 & 2001-02

• [1] Computed from Conly, Shanti (2004) “Educating Girls: Gender Gaps and Gains”, Population Action International, http://www.populationaction.org/resources/publications/educating_girls/ggap_graph02.htm.

Part of wider work

• Investigating education-earnings relation in Pakistan / Ghana

• For this presentation, focusing on Q: Can educ be a path to gender equality in the labour market?

• E can have direct effect on earnings; also indirect effect via occup

• Goals are to examine: – Whether E/skills improve women and men’s occupational attainment– Whether E/skills raise women and men’s earnings (within occupation)

• Compare women and men’s returns to E/skills

• Separately by age group

• Pakistani labour market - sharply segregated by gender

Log_earnings

Wage employment earnings Self employment earnings Agricultural earnings

5 10 15

0

.2

.4

.6

.8

• Next we ask: – How occup changes with age (transitions)– How occup changes with education level

• Find occup choices of women much narrower, suggesting – sharp gender division of labour– conservative attitudes to women’s econ work

• This limits the extent to which educ can be a path to gender equality in economic outcomes

Conclusions• RORE/skills greater for women in all occupations and in

both age groups.

• Could reflect :– scarcity of educated women – existence of jobs which require (or are reserved for) edu women

• Gender pattern of returns is welcome and provides strong economic incentives to acquire schooling.

• Positive story counterbalanced with overall returns to employment being far lower for women

• Even though RORE may be high for women (slope 3 times as steep), have much lower earnings (lower intercept)

• Aslam (2007): a large part of gender wage gap not explained by gender diff in productivity endowments, due to pot. discrimination (though more work is needed to get better measures of experience, quality of S)

• Education of women reduces that wage gap, i.e. there’s less discrimination among educated

• Thus, total labour market returns are higher for men even though returns to edu are higher for women

• This gives parents an investment motive for investing more in sons

• Even if return higher for girls, the part of it which accrues to parents is lower

• To reduce its gender gaps in educ, it needs not only supply-side measures eg improving school supply for girls

• Also needs to address the demand side : • ease credit constraints (e.g. attendance-contingent transfers to girls)• labor market policies to reduce gender-diff treatment by employers• Address conservatism of attitudes to women’s educ

• RORE invariably greater for the older group

• Plausible explanation is ‘filtering down’ of occupations

• Successive cohorts of workers at a given educ level enter less and less skilled jobs (Knight, Sabot and Hovey, 1992)

• When our ‘old’ group got their jobs, primary completers in scarce supply and primary may have been sufficient to obtain white-collar job. Those who obtained such jobs remain in them today. But rapid expansion of supply of educ, primary completers among ‘young’ today fortunate to even get a low paying blue-collar job.

• So, over time, there is a compression of wages by education level.

• Thus, ROR for a given level of educ lower for younger workers because they perform less skilled tasks than older persons with that level of educ