Occupational segregation and gender earnings inequality: evidence from Kenya

This study investigates Kenya’s gender pay gap using the BMZ decomposition framework and nationally representative 2021 KCHS data (6,653 wage workers; 4,210 men and 2,443 women). We find a 12.1% gender pay gap and the dissimilarity index indicates a substantial occupational segregation; achieving gender-equitable distribution would require 37% of workers to switch occupations. Decomposition results refute a purely human capital explanation, as women’s characteristics predict higher earnings. Instead, the gap is predominantly driven by unexplained intra-occupational disparities (138% of the gap), reflecting systemic undervaluation of women’s productivity traits consistent with taste-based discrimination and temporal inflexibility, whereas occupational sorting, inter-occupational factors, modestly reduces it. Notably, the rural pay gap is nearly nine times larger than the urban gap (27.9% vs. 2.8%), where weak regulatory enforcement allows biases to operate unchecked. Robustness checks validate these findings. Results suggests policy must therefore move beyond ensuring occupational access to transforming wage-setting practices within occupations.