Gender Wage Differences in Malaysia: Parametric and Semiparametric Estimation

This paper is an empirical study on the labor force in (Peninsular) Malaysia. It applies both parametric and semiparametric sample selection methods to the estimation of wage equations. These equations are then used to assess the extent of gender ?discrimination? - i.e., the part of the wage-gap that cannot be attributed to differences in wage determining characteristics. In order to establish a consistent estimate of the intercept of the outcome equation in the semiparametrically estimated sample selection model, the estimator suggested by Andrews and Schafgans (1996) is used. Both the parametric and semiparametric results suggest that ?discrimination? favoring men in Malaysia is still quite prevalent. For Malays (the ?sons of the soil?), on the other hand, the semiparametric estimation results negate the strong level of ?discrimination? favoring Malay men obtained from the parametric results.