This paper presents an overview of gender and ethnic wage gaps in 18 countries in Latin America and the Caribbean. The wage gaps are decomposed using a matching comparisons methodology which is a non-parametric alternative to the Blinder-Oaxaca decomposition. The methodology emphasizes the role of the differences in the supports of the distributions of observable human capital characteristics. The failure to recognize those differences in the supports has been found to upwardly bias the estimates of unexplained differences in pay under the traditional Blinder-Oaxaca setup.

After controlling for observable characteristics, we find that men in the region earn between 11% and 18% more than women. The gender gap is higher among those with lower income, head of households, those with secondary incomplete and living out of the capital cities. Ethnic non-minorities earn between 25% and 40% more than minorities. The higher ethnic wage gaps are found at both extremes of the wage distribution. Also, the gaps are higher among head of households, with no education, out of the capital cities and older people. The data also suggest important access barriers to high paying occupations among ethnic minorities.