Gender Wage Gaps and Worker Mobility: Evidence from the Garment Sector in Bangladesh

We use administrative data from 44 large garment factories in Bangladesh to examine pay differentials between female and male production workers. Wages are highly regulated, with the government specifying, and our firms complying with, minimum‐wage rates for each operator grade level. Even in a context where the average wage of operators is only a few percentage points above minimum‐wage , we find that men are paid 5‐8 percent more than women. The higher wages are largely the result of men being on average graded almost a full level higher. Using exceptionally detailed skills data from a subset of 15 factories. We show that men have higher wages and grades even conditioning on skills, with only a third of the gaps explained by differences in skill levels. The fact that men are graded higher even conditional on skills focuses our attention on promotions. We find that men are promoted slightly more frequently, but the promotion gap is not enough to explain the grade gap. Rather, the data indicate that most promotions are “external promotions” that take place when workers leave one factory for a higher grade at another factory. Across their careers, males are more mobile, with average firm tenure rates that are seven months, or 25 percent, shorter than those for females. We explore two reasons why men may be more mobile: women may face higher costs of changing factories because they are juggling household responsibilities as well as work, and men may have stronger incentives to seek promotion because they ultimately want to advance into management, a path that is all but foreclosed to women. We find somewhat more evidence for the promotion‐driven channel.