Inter-Regional Gender Pay Gap of Public-Private Sectors in the Iranian Labor Market: Neumark Decomposition Approach

Gender wage discrimination in the labor market can lead to an inefficient allocation of human resources and have negative effects on economic growth. Due to provincial gender pay gaps (GPG), identification of the principal determinants of wage differentials between males and females is an important phase in analyzing the labor market. Using micro-data of urban household income and expenditure survey in 2017, this study has decomposed the GPG in five major regions in the Iranian labor market to determine the role of specific regional characteristics. For this purpose, we use the Neumark decomposition approach, which is an extended form of Oaxaca-Blinder decomposition. The results show that the gender pay gap exists in all regions on behalf of males. Among all regions, except region 2, more than 80 percent of the gender wage gap has origin in labor forces attainments especially including human capital and experience, and the remaining part is attributed to discrimination. While in region 2, labor force attainments and discrimination have shaped the gender wage gap equally.