Annex 2A: Mincerian Equation Results

The stability of women in the labor market (regardless of marital status or children) is a necessary, but not sufficient, condition for the jobs-to-careers transition. In Sri Lanka, Turkey, and Vietnam, the rise in working married women along with their human capital suggests that conditions are present to transition toward a service-oriented female workforce. Egyptian women also share higher educational attainment, but the low overall FLFP might be a limiting factor for the transition to happen.

In Sri Lanka and Turkey, the broad distribution of employment across occupations signals that the transition is in its initial stages, but it has not yet started in Egypt or Vietnam, perhaps because of labor demand limitations. Because working women in these two countries are more highly educated, on average, than nonworking women, several overlapping dynamics could be at play: (a) the minimum wage women will accept is not available in the labor market; (b) spousal household income is preventing their labor participation; or (c) cultural norms are hindering female work.

What Role Can Apparel Jobs Play? The bottom line is that apparel jobs offer opportunities for the least educated women but offer little incentive for the current generation to invest in the education needed to pursue HSOs. In most of the apparel exporting countries studied here, wage gaps between women and men have widened, probably because of occupational segregation, educational differences, or structural discrimination.

However, women’s real wages have increased in all the sample countries. And large returns to education might encourage women to invest in their education—a necessary requirement for careers that require higher human capital. Yet only in Sri Lanka has the education wage premium diminished for initial levels of education, hence creating large incentives for women to continue in school past the lower-secondary level.

As more education propels long-term adjustment from jobs to careers, the big education wage premiums for women in all countries represent grounds for optimism. However, even as countries raise human capital and females stay longer in the labor market, labor demand has yet to increase to absorb these more-educated, moreexperienced women into careers befitting their increasing skills.

There are many different dimensions of both labor market characteristics (industry and occupation mix, output prices, and geographic differences) and individual worker characteristics (age, education, experience, industry, occupation, and others). Therefore, we use Mincerian equations to explore the components that explain the wage gaps driving gender wage differentials and to see whether education or other policies might support the transition toward better-paid jobs and careers. Results are discussed in the main text.