Gender and ethnic wage differentials inhibit growth: A shred of evidence

Abstract

Racial, ethnic, and gender wage differentials, in particular those that are not explained by human capital differences between the respective groups, are fixtures of labor markets in almost all countries, developed and developing alike. Discriminatory wage differentials have detrimental social and economic effects. Gender differentials have larger distortional effects than other ethnic and racial differentials, and might call for different policies to address them. Measuring and documenting wage and employment differentials is an essential first step towards eliminating these differentials, which in turn is a very important economic as well as social policy goal akin to the Sustainable Development Goals set by the international community.