An Empirical Investigation of the Determinants of Wage Differentials in Namibia

Abstract

Although several programme are put in place to ensure equal pay for work of equal value in the United Nations Goal 8 of the 2030 Sustainable Development Agenda which seeks to achieve equal pay for men and women, wage differential still remains and continues to be a matter of concern around the globe. For this reason, this study was aimed at identifying the determinants of wage differentials in Namibia using an Ordered Probit regression technique on data obtained from the 2018 Namibia Labour Force Survey. Results from this study showed that majority of the household heads were in the lower wage range of N$300 to N$4999, males, did not have social security, resided in urban areas, had elementary occupation, did not belong to a union, had secondary education attainment and were employed in the private sector. In addition, this study showed that the head of household's highest education attainment, occupation, residential location, employment sector, social security membership, union membership and sex had a significant impact on their wage levels. Furthermore, household heads with secondary and tertiary education, who were males, living in urban residential area, with social security and union memberships were more likely to be earning a (monthly) wage of at least N$20000 and less likely to be earning between N$300 to N$4999.

It is therefore recommended that the Namibian government invest more into education by providing free and quality education at secondary and tertiary levels that will equip people to take up higher paying jobs especially among women. Additionally, since the disparity of wage between the urban and rural areas tends to drive people from rural to urban areas, there is an urgent need to develop the rural areas and create more opportunities for rural dwellers.