The report shows that in almost all countries studied there are wage gaps between men and women as well as between national and migrant workers. These gaps arise for multiple and complex reasons that differ from one country to another and vary at different points of the overall wage distribution. These wage gaps can be divided into an "explained" part, which is accounted for by observed human capital and labour market characteristics, and an "unexplained" part, which captures wage discrimination and includes characteristics (e.g. having children) that should in principle have no effect on wages. The report shows that if this unexplained wage penalty was eliminated, the mean gender wage gap would actually reverse in Brazil, Lithuania, the Russian Federation, Slovenia and Sweden, where the labour market characteristics of the disadvantaged groups should result in higher wages. It would also nearly disappear in about half the countries in the sample of developed economies.
A similar analysis is carried out to compare the wages of migrants with those of national workers, showing that in various countries the mean wage gap would reverse if the unexplained part of the gap was eliminated. Among developed economies, this is the case in Denmark, Germany, Luxembourg, the Netherlands, Norway, Poland and Sweden. In Chile, migrant workers earn more than their national counterparts on average.
The report also finds a wage gap between workers in the formal and the informal economy; this is shown in the report, for example, in wage gaps affecting workers in the informal economy for selected Latin American countries. As with gender and migrant wage gaps, the wage gap for workers in the informal economy is generally lowest in the bottom deciles and increases for higher wage earners. In addition, the observable labour market characteristics of informal economy workers differ from workers in the formal economy across all points of the wage distribution and for all countries (i.e. there is an explained gap across the entire distribution). At the same time, however, the unexplained part of the wage gap remains significant.
