The Gender Earnings Gap and Informal Sector Self-Employment in the South African Labor Market

The informal economy is an important site of gender inequality yet there has been comparatively little research on the gender earnings gap in contexts with relatively high levels of informal self-employment. Using South African data, this article investigates gender gaps in the informal sector with a particular focus on own-account self-employment. Among these workers, the gender differential is far wider at the bottom of the distribution where self-employment is likely to be “survivalist” and where most of the gap is not explained by observable characteristics. These findings suggest that factors such as social norms concerning “women’s work,” constraints on women’s time, and access to infrastructure may be more important than human capital in addressing gender gaps in the informal sector. A serious effort to reduce gender inequality therefore requires addressing the drivers of gendered inequalities in informal self-employment where the vast majority of women in middle- and low-income countries work.HIGHLIGHTSThe informal economy is an important but underexplored site of gender inequality.Gendered vulnerabilities arise through segmentation by employment status and occupation.South African data shows the gender earnings gap is widest in “survivalist” self-employment.Women earn less due to concentration in vulnerable segments and within-job pay gaps.Policy responses must address nuanced sources of gender discrimination in the informal economy.