Gender earnings gap among the youth in Malawi

Abstract While young women's engagement in economic activities is an essential component of development, gender gaps are still commonly observed worldwide and especially in developing countries like Malawi. This study introduces recent data to provide new evidence for a sub‐Saharan country that has yet been closely examined. Using the International Labour Organization's School‐to‐Work Transition Survey (ILO SWTS) individual‐level data, I examine the gender earnings gap among the youth in Malawi by conducting Mincer earnings regressions with Heckman selection correction and applying Blinder–Oaxaca decomposition methods. I find that young women in Malawi earn significantly less than young men and that women are significantly less likely to engage in income‐generating work activities. Also, substantial unadjusted gender earnings difference in Malawi is overwhelmingly due to differences in returns. Moreover, detailed decomposition results show that gender differences in work‐related individual characteristics and firm characteristics also contribute to the gender earnings gap. The results suggest that any effort to reduce the gender earnings gap should involve improved access to education as well as better workplaces for women.