This study presents an analysis of the determinants of wages as well as a decomposition
of the gender gap across sectors in Kenya. The study tests the hypothesis that women
participate less in the labour market partly because of their characteristics and partly
because of gender discrimination in wage setting. Multinomial logit techniques and
ordinary least squares (OLS) with and without sample selection are used to explain
participation and earnings. The results indicate that education and other demographic
factors are important determinants of the choice of sector of employment and earnings
and that there is no serious self-selectivity problem. The gender gap decomposition results
suggest that favouritism towards men is pronounced in all sectors, while there is no
evidence of discrimination against women. The study recommends investment in
instruments to reduce gender inequalities in access to education and also government
policies that minimize favouritism towards men.