Gender wage differences in Malaysia: parametric and semiparametric estimation

This paper is an empirical study on the labor force in (Peninsular) Malaysia. Parametric and semiparametric estimated wage equations, which correct for sample selection bias, are used to assess the returns to education and extent of gender ‘discrimination’. To estimate in the semiparametric case the wage equation intercept, which is needed for the Oaxaca wage decomposition, consistently we apply the newly developed Andrews–Schafgans [Andrews, D.W.K., Schafgans, M.M.A., 1998, Semiparametric estimation of the intercept of a sample selection model, Review of Economic Studies, 65: 497–518.] estimator. The results suggest that ‘discrimination’ favoring men in Malaysia is still quite prevalent, while for Malays (the ‘sons of the soil’) the strong level of ‘discrimination’ favoring Malay men is negated by the semiparametric estimation results