Social Politics 2023 Volume 00 Number 0

Older Working Persons and the Gender

Pay Gap: Estimations Using Gender

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Norm Variables in Peru
1,2,
Marıa Amparo Cruz Saco *, Mirian Gil3 and
Valeria Vergaray4

This study investigated the gender pay gap in Peru among older working persons,
i.e. sixty years of age and older, who represent more than half of this population.
Cultural and social gender norm variables were incorporated as regressors in a
Mincer-type income model. Household surveys for the period 2004–2021 were
used to estimate the total gap and regional heterogeneities. Three gender norm
variables substantially increase the explained portion of the gender pay gap in the
Oaxaca–Blinder decomposition. We find that the estimated pay gap among older
working persons is 68 percent, larger than the gender pay gap for younger work-
ers as documented in diverse contributions.

Introduction
Despite significant economic growth and social advances, Peru contin-
ues to have high rates of gender inequity in health and survival, educational
attainment, wage equality for similar work, and overall economic participation
and opportunities (World Economic Forum 2022, 290). Patterns of gender ineq-
uity and discrimination that women experience during youth and adulthood
continue into old age. This is particularly important in Peru, where more than
half of the population continue to work beyond sixty years of age1 to avoid fall-
ing into poverty. Pension coverage is among the lowest in Latin America with
close to half the population unable to access coverage (INEI 2022a; Mesa-Lago
2021; Mesa-Lago, Cruz Saco, and Gil 2021; Office of the Ombudsperson 2019;
Olivera and Clausen 2013). Only 35 percent earn a contributory pension,2 with
24 percent covered by the public pay-as-you go pillar (ONP), and 11 percent

1
Connecticut College, USA
2
Universidad del Pacıfico, Peru
3
Ministerio de Educación del Perú, Peru
4
Gesellschaft für Agrarprojekte in Übersee, Germany
*macru@conncoll.edu

socpol: Social Politics, 2023 pp. 1–25

https://doi.org/10.1093/sp/jxad022
# The Author(s) 2023. Published by Oxford University Press. All rights reserved.
For permissions, please e-mail: journals.permissions@oup.com
2 M. A. Cruz Saco et al.

covered by the private pillar (PPS). Another 20 percent of persons aged over
sixty-five years are covered by a social pension program, Pensión 65, created in
2012 to cover the extremely poor (Ministerio de Desarrollo e Inclusión Social
2022). This leaves a significant portion of the population without coverage.

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Many of those who can access a pension still find it insufficient to cover their liv-
ing expenses. Furthermore, a gender gap in Peruvian pension savings has also
been substantiated.
Notwithstanding gender disparities in both income and pensions, no at-
tempt has been made to analyze the nature of the gender pay gap in older
working persons (sixty years and older) in Peru. We fill this gap by providing
evidence of a gendered income disadvantage in old age, demonstrating that
the gender pay gap is notably higher than that found in the previous research
focused on younger workers. This insight is necessary for adequate public pol-
icy interventions to help older persons who despite difficulties, including
chronic health issues, continue to work in order to survive.
We employ a Mincer-type labor income model, the Oaxaca–Blinder (O–B)
decomposition using household surveys for the period 2004–2021, and restrict
the sample to older persons who work. We find that the average national gen-
der pay gap is 68 percent, and that it decreases slightly over time. This gender
pay gap is substantially larger than any identified existing gap for workers
aged fifteen to fifty-nine years (Defensorıa del Pueblo 2019; Marchionni,
Gasparini, and Edo 2018; Nopo ~ 2012; Urquidi and Chalup 2023; Vaccaro
et al. 2022). It is highest in urban areas, 80 percent, due to the simultaneous
existence of low- and high-productivity occupations, and the feminization of
low-productivity jobs. As is standard in the O–B decomposition, the unex-
plained portion of the gap (not explained by observable variables such as
skills, experience, and other personal characteristics) is attributable to gender
discrimination, stereotyping or women’s preferences, and discretion.
Our research introduces observable variables that we believe capture gen-
der norms in Mincer-type labor income models, allowing us to assess the role
of discrimination in explaining the pay gap. The three gender variables identi-
fied are as follows: “being head of household,” “receiving private (family)
transfers,” and “political participation.” When used in the O–B estimations,
the explained component of the gap increases remarkably from 57 percent in
not-Metropolitan Lima (not-ML) and 47 percent in rural areas to 91 percent
broadly. This finding provides empirical evidence of the role larger gender
regimes play in pay gaps among older working persons as suggested in
Beltrán, Cruz Saco, and Pérez (2021) and Cruz Saco, Gil, and Campos (2022).
The reality for older working women in Peru cannot be properly under-
stood without giving special attention to personal characteristics and geo-
graphical location. This allows us to identify how work pay is affected by a
person’s background and to illustrate the geographical heterogeneities. As im-
portantly, our study has opened up questions for future research. For exam-
ple, analyzing how the pay gap is affected by intersecting identities such as
Older Working Persons and the Gender Pay Gap 3

social class and indigenous/nonindigenous ethnicity can shed light on the best
public policy interventions to reduce gender inequities.
In the following section, we review the existing literature on the gender pay
gap and the gender pension gap in Peru. We then provide a theoretical over-

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view of gender norm variables introduced in this article to empirically assess
the role of discrimination in the pay gap. This overview is followed by the esti-
mation results, their discussion, conclusions, and recommendations.

The Gender Pay Gap in Peru

Peruvian institutions have historically subordinated women and limited their
economic participation in many ways (Miró Quesada and Nopo ~ 2022).
Additionally, gender-based violence aggravates the suppression of women’s hu-
man rights and reinforces the feminization of occupations and unpaid work
(Ames 2006; INEI 2021; Oliart 2012;). The existence of the gender pay gap is
well evidenced among younger persons. Vaccaro et al. (2022, 20) find that “the
raw wage gap showed an upward trend between 2007–2011, ranging from 6% to
12%, and remaining around that top bound ever since.” Marchionni, Gasparini,
and Edo (2018, 240) estimate a higher gender pay gap, with women in Peru
earning a salary 30 percent lower than men despite having the same observable
characteristics. Using household surveys, Urquidi and Chalup (2023, 19) simi-
larly estimate that the hourly gender pay gap in Peru was 30 percent in 2019.
Seven percent is explained by individual characteristics, but 23 percent is unex-
plained (attributed to unobserved discrimination). Among working women,
Lavado (2017, 45) concludes that the gap is 10.8 percent against women with
children. There are several explanatory factors for the persistent gender pay gap
in Peru, including the disproportionate amount of time spent on caregiving,
working low-productivity jobs, earning much lower incomes, and being victims
of gender-based violence (Beltrán and Lavado 2014; Defensorıa del Pueblo 2019;
Freyre and López 2011; Fuertes, Rodrıguez, and Casali 2013; Garavito 2018;
Lavado 2017; Mejıa 2014; Ojeda 2010; UN Women 2014; Velazco and Velazco
2013). Women also face major barriers in to acquiring education and profes-
sional experience, both of which are necessary to gain a higher paying job
(Barrantes-Cáceres and Matos-Trifu 2019; Lavado 2017).
Care work has a significant impact on social security coverage (Beltrán and
Lavado 2014). As stated by the OECD (2022a), women are less likely to work
for pay and, on average, spend twenty-four more hours per week on unpaid
tasks (looking after children and elderly relatives and doing housework).
Women exit the workforce at much higher rates than men and are culturally
expected to interrupt their careers to perform unpaid care and domestic work
in order to support their families (Chant and Craske 2003; Marchionni,
Gasparini, and Edo 2018). This work takes many forms including care for
children, older persons, and/or persons with chronic illnesses or disabilities,
4 M. A. Cruz Saco et al.

and preparation of food (Beltrán and Lavado 2014; Gálvez 2001; OECD
2022b). Working women covered with social security lose or remarkably im-
pact their coverage by leaving the labor force temporarily or permanently to
focus on domestic labor (ILO 2017). In addition, women’s disproportionate

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engagement in more informal kinds of work explains existing wage gaps and
entrenches traditional gender norms (World Bank 2018).
As one would expect, domestic and care work affects women of all ages.
Ramos, Vera-Tudela, and Cárdenas (2009) find that due to the absence of
childcare assistance for working women, older women support their children
by providing unpaid domestic and care work at home. Blouin, Tirado, and
Mamani (2018) document a higher vulnerability of older women in relation
to health status, well-being, and social integration. This means that older
women not only provide care at a higher rate but may also need more of it.
Some research argues that neoliberal policies generally empowered women
with greater access to education, labor market participation, access to health-
care services, entrepreneurship, and representation (Barrig 2007; Blondet 2002;
Hernández and Canessa 2012; Mannarelli 2004; World Bank 2018). However,
many strongly oppose the idea that gender equity was a goal or consequence of
neoliberal restructuring. Ewig (2012), using a dynamic analysis of top–down
policy formation and bottom–up policy implementation, argues that neoliberal
healthcare reforms caused greater stratification and increased gender, racial,
and class inequity. For instance, neoliberal family planning policies resulted in
the forced sterilization of hundreds of poor, rural, Indigenous women in the
southern highlands. This policy did not empower women, but amounted to
governmental gendered abuse that in some cases resulted in death.
Neoliberal policies implemented throughout Latin America, notably pen-
sion reforms, have distinct gender implications, particularly given the caretak-
ing roles generally filled by women, who must take on greater responsibilities
in the face of the state’s abandonment of its role of providing social services.
For example, the Peruvian private pension system created in 1993 shows that
a gender gap which favors men can be observed at each percentile of the dis-
tribution of pension funds (Olivera and Iparraguirre 2022). Furthermore,
women work in lower-productivity jobs, and receive lower incomes, hamper-
ing their ability to accumulate and generate adequate levels of pensions
(Altamirano et al. 2018). They have also been shown to have higher rates of fi-
nancial illiteracy, affecting their ability to make informed decisions about their
pensions (Olivera and Iparraguirre 2022).

Gender Norm Variables

Gendered power dynamics are prevalent across Latin American countries,
Peru included, and are strongly linked to inequity in the home, at work, and
in public (Almerás and Calderón 2012; Duflo 2012; Hearn et al. 2022;
Older Working Persons and the Gender Pay Gap 5

Marchionni, Gasparini, and Edo 2018; Nussbaum 1999; Perry and Borzutzky
2022; Rodrıguez and Pautassi 2016; Shepherd 2019; Walby 2020; World
Health Organization 2021). A large gender pay gap among persons fifteen to
sixty-four years of age in Peru is not explained by the traditional variables:

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training, experience, and skills (Barrantes-Cáceres and Matos-Trifu 2019;
Beltrán and Lavado 2014; Marchionni, Gasparini, and Edo 2018; Lavado
2017; Vaccaro et al. 2022). It is our belief that gender norms have explanatory
value in relation to the gender pay gap.
The use of observable gender norms as regressors in the O–B decomposi-
tion is useful to uncover discrimination in Mincer-type pay income equations.
The three identified variables shed light on stylized features of male domina-
tion (“head of household” and “political participation”) and on familial reci-
procity for mothers and grandmothers (“receiving private transfers”) when
social security protection is largely absent.
One of the terms used by the Peruvian National Statistics Institute (INEI),
is jefe de hogar, which translates to “head of the household” (INEI 2022b).
However, in Spanish, jefe translates to boss and is an explicitly male term.
Research has found a robust relationship between gendered languages and
women’s labor force participation and educational attainment (Jakiela and
Ozier 2020). The presence of gender in language that is adopted by the INEI
can act as a marker for culturally acquired gender roles, and these roles have a
demonstrated impact on household labor allocation (Gay et al. 2018). Jefe, as
well as being explicitly male, denotes a nuclear heterosexual household. In do-
ing so it alienates different kinds of kinships, whether that be single mothers,
communal living situations, or multigenerational households (Bradshaw,
Chant, and Linneker 2019; Braunstein and Folbre 2001). Mora Salas (2004,
18) connects the use of jefe de hogar to women’s subordination, suggesting
that, for cultural reasons, women tend to recognize men as jefe, even in cases
where they are the main decision-makers or contributing more resources to
support the members of the household. Male heads of household should re-
ceive more income as men are culturally expected to provide for their family
networks. Therefore, we consider jefe de hogar a gender variable that may have
explanatory force.
The second variable we examine to more comprehensively capture gender
norms is “receiving private (family) transfers.” This variable captures upward
financial reciprocity within families, most granted by working adults to older
women in return for the care they provided them when they were children
(Cruz Saco and Zelenev 2010; Falzarano et al. 2022; López-Anuarbe, Cruz
Saco, and Park 2016; Park, Cruz Saco, and López-Anuarbe 2017). “Private
(family) transfers” represent an informal, familial recognition of the unpaid
care labor provided by mothers, costing them the opportunity to participate
in the formal labor force. Given the gendered trends of these payments, we
consider this a gender variable. Receiving private transfers should reduce the
need to participate in the labor force and, therefore, work income.
6 M. A. Cruz Saco et al.

The final variable which we believe captures gender norms is “political par-
ticipation.” In the survey question, the INEI offers several options for
“political participation,” including, but not limited to, participation in associ-
ations of producers and service providers, sports organizations, social clubs,

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neighborhood assemblies, town-hall meetings, and political parties. Women
have historically been excluded from political participation, and this trend has
persisted even after the removal of formal barriers. The public realm has al-
ways been framed as a male domain, with women being relegated to the
home. Bando (2019, 8) and Arriagada (2005, 81) examine the ways in which
men construct their self-image through participation in politics and public
forums. Men in particular seek to demonstrate strong leadership, and associ-
ate public recognition with greater success in the labor markets. In contrast to
this type of participation, women organize themselves around family, sustain-
ability, and social justice through coalition building and solidarity (Naples
1998; Rotramel 2020). This political participation, however, is largely unre-
corded in household surveys. Therefore, we consider “political participation”
as a gendered variable.

Methodology and Data

Our data come from the household surveys over the period 2004–2021
(INEI 2022b). We restrict the sample to persons aged sixty years or older who
participate in the labor force and earn an income. Excluded from the analysis
are persons aged sixty years or older who participate in the labor force but do
not earn an income, and persons aged sixty years or older who are not part of
the labor force. The latter may have other sources of income including old-
age pensions, rents from assets, or private support and transfers from their
family-based intergenerational solidarity (Cruz Saco and Zelenev 2010).
Alternatively, their health status may not allow them to work. We estimate a
Mincer-type relationship for labor earnings and apply the O–B decomposition
for the pay gender gap.
The pooled sample size for the study is 127,035 persons, which represents
49.8 percent of the total number of persons aged sixty years or older in the
pooled national household sample of the instrument. Table 1 summarizes key
variables by gender for the beginning of the period, 2004, for the end, 2021,
and over 2004–2021.
As can be seen, the proportion of working men (63 percent) is higher than
working women (37 percent). The mean age is sixty-eight years for both gen-
ders. Most workers are self-employed although the proportion is decreasing.
In 2004, 10.2 percent of women and 14.8 percent of men were employees, and
these proportions increased to 18.0 percent and 23.6 percent in 2021. For the
pooled sample, the proportions were 14.9 percent for women and 21.7 percent
for men.
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Older Working Persons and the Gender Pay Gap
Table 1. Main descriptive statistics for 2004, 2021 and the pooled sample in 2004–2021

Main indicator 2004 2021 Pooled sample 2004–2021

Women Men Total Women Men Total Women Men Total

Sample, N 1,226 2,551 3,777 3,696 5,921 9,617 46,641 80,394 127,035
Mean age 68.4 68.2 68.3 68.1 68.1 68.1 68.4 68.3 68.3
Employment by status (percent)
Employed 10.2 14.8 13.3 18.0 23.6 21.5 14.9 21.7 19.2
Self-employed 89.8 85.2 86.7 82.0 76.4 78.5 85.1 78.3 80.8
Annual labor income (S. 2021)
Quartile 1 (P25) 335 712 531 986 2,166 1,526 658 1,365 1,011
Quartile 2 (P50) 895 2,039 1,500 2,637 6,180 4,576 1,935 4,164 3,110
Quartile 3 (P75) 2,134 4,885 3,854 7,087 13,337 11,229 5,157 10,739 8,712
P99 (top 1 percent or “elite”) 13,624 49,608 37,346 76,922 88,419 81,993 52,555 90,690 76,107
Mean 1,889 4,502 3,654 7,634 11,394 9,949 5,403 9,612 8,066
Earns contributory pension (percent)
Yes 2.8 10.9 8.3 6.5 12.8 10.3 3.9 10.7 8.2
No 97.2 89.1 91.7 93.5 89.7 89.7 96.1 89.3 91.8
Earns Pensión 65 – – – 20.9 18.1 19.1 14.4 12.3 13.1
Contributes to a pension system (percent)
PPS 0.7 1.8 1.5 6.7 13.4 10.8 4.2 10.3 7.9
ONP 3.8 8.9 7.3 12.6 18.1 16.0 12.3 21.0 17.8
Continued

7
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8
Table 1. Continued

Main indicator 2004 2021 Pooled sample 2004–2021

Women Men Total Women Men Total Women Men Total

Education (percent)
Low (0–8 years) 90.8 81.7 84.6 69.1 58.0 62.3 77.4 66.1 70.2
Medium (9–13 years) 6.1 12.5 10.4 17.6 28.0 24.0 13.7 21.8 18.8
High (14þ years) 3.1 5.8 4.9 13.3 14.0 13.8 8.9 12.1 11.0
Area of residence (percent)
Rural 51.2 59.8 57.0 45.1 52.4 49.6 45.7 52.3 49.8
Urban 48.8 40.2 43.0 54.9 47.6 50.4 54.3 47.7 50.2

Source: Authors’ elaboration based on household surveys, INEI (2022b).

M. A. Cruz Saco et al.

Older Working Persons and the Gender Pay Gap 9

The labor income distribution by quartiles and for the top P99 (represent-
ing the top 1 percent or the “elite”) in constant 2021 soles (S.2021) uncovers
an extremely unequal distribution of labor income per groups or classes. We
observe that the median (quartile 2, P50) is substantially lower than the mean

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income, an indicator that the distribution is skewed to the right (high-income
workers). A comparison of the average income per quartile and of the top 1
percent shows the extent of income inequality. In 2004, for both genders, an-
nual earnings for low-income workers (quartile 1) were on average, S.531 or
US$140; for low-middle workers (quartile 2), S.1,500 or US$395; for upper-
middle workers (quartile 3), S.3,854 or US$1,014; and for the elite (P99 or top
1 percent), S.37,346 or US$9,828. As a percentage of the elite’s earnings, the
proportions were 1.4 percent, 4 percent, and 10.3 percent for low-, low-
middle-, and upper-middle-income workers. In 2021, these proportions were
1.9 percent, 5.6 percent, and 13.7 percent for low-, low-middle-, and upper-
middle-income workers. These figures show a sharp income inequality among
older working persons in different groups and more importantly, a “have and
have-not” stratification between the elite and the other social groups. As other
scholars have shown, income distribution in Peru is one of the most unequal
globally (Alarco, Castillo, and Leiva 2019; Chancel 2022; Cruz Saco,
Seminario, and Campos 2018). It is notable that a large proportion of older
working persons, except for the elite, make labor incomes below the poverty
line, S.4,536 in 2021 (INEI 2022c, 48). This is concerning because it suggests
that those who are failed by the inadequacy of social protection from pensions
take home meager pay for their work.
A related aspect that will require future research is the relative increase of
women’s work earnings at the top 1 percent over 2004 and 2021. As shown in
table 2, on average for quartiles 1–3, the proportion of women’s income rela-
tive to men’s is less than half except for the elite. Elite women made substan-
tial strides, from 27.5 percent to 87 percent. More investigation is needed to
determine whether this progress is a result or greater training and years of

Table 2. Women’s average earnings as a percentage of men’s average earnings, 2004, 2021
and average 2004–2021

2004 2021 Average 2004–2021

Quartile 1 (P25) 47.1 45.5 48.2

Quartile 2 (P50) 43.9 42.7 46.5
Quartile 3 (P75) 43.7 53.1 48.0
P99 (top 1 percent or “elite”) 27.5 87.0 58.0

Source: Authors’ elaboration based on information on table 1.

10 M. A. Cruz Saco et al.

experience among elite women, as was the case for younger women (Vaccaro
et al. 2022).
A very small proportion of older working persons earn a contributory pen-
sion which supports the proposition that lack of coverage is a driver to labor

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participation. In 2004, 2.8 percent of older women and 10.9 percent of older
men earned a contributory pension; these proportions were 6.5 percent and
12.8 percent in 2021, and on average, 3.9 percent and 10.7 percent for the
pooled sample. These contributory pensions add to their monthly labor in-
come. The proportions were 14.4 percent and 12.3 percent for the pooled
sample.
Persons aged sixty to sixty-five years can contribute to the ONP or to the
PPS; however, a very small percentage do so. For the pooled sample, the aver-
age was 4.2 percent to the PPS and 12.3 percent to the ONP. Women contrib-
ute far less than men. In 2004, the number of older working persons who
contributed to the PPS relative to the ONP was 20 percent (1.5 percent versus
7.3 percent for both genders). In 2021, the proportion increased to 44 percent
(7.9 percent versus 17.8 percent). This shows that preference for the PPS has
increased.
The level of education of persons sixty years or older who work is low;
however, it has increased between 2004 and 2021. For working women with
low education, the improvement is relatively less. This was also observed by
Vaccaro et al. (2022) in younger women.
Finally, the sample is distributed according to rural or urban areas. In
2004, 51.2 percent of women and 59.8 percent of men resided in rural areas.
These proportions decreased to 45.1 percent of women and 52.4 percent of
men in 2021.

Estimations
National level
The OLS baseline estimation for the dependent variable—the natural log of
labor income (in 2021 soles)—is presented in table 3. In January 2022, the
INEI updated the base year to 2021 (INEI 2022d). The labor income is from
the main and secondary occupations. We use a Mincer-type equation for both
genders combined to assess labor income with control variables or standard
regressors that include training and experience, and demographic, socioeco-
nomic, and personal characteristics. These include age, chronic disease, limita-
tions to mobility, level of education, time on the job, employment status (self-
employed or dependent worker), mother tongue (Spanish or other), civil sta-
tus, number of family members co-residing, geographic region, health insur-
ance, earns a contributory pension, earns Pensión 65, without bathroom
services at home, contribution to a pension pillar, and income received from
other pensions (orphan, widower, divorced, etc.).
Older Working Persons and the Gender Pay Gap 11

Table 3. Baseline regression (both genders), 2004–2021 and 2014–2021

Variables 2004–2021 2014–2021

(1) (2)

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Age 140.6*** 161.4***
(7.050) (10.40)
Chronic disease (0, 1) 59.90 510.3***
(91.16) (130.7)
Limited mobility (0, 1) 416.6
(264.6)
Education (low 0, high 1) 2,574*** 2,168***
(100.2) (139.8)
Time on the job 81.13*** 96.85***
(2.656) (3.709)
Employment status (self 0, dependent 1) 5,539*** 6,590***
(125.9) (171.4)
Native language (0, 1) 1,939*** 2,125***
(116.2) (162.1)
Other foreign language (0, 1) 6,836*** 9,458***
(1,026) (1,312)
Civil status (single 0, in partnership 1) 1,456*** 1,600***
(100.1) (139.6)
No. of co-residents at home 218.5*** 174.1***
(22.20) (33.70)
Region of residence (basis: northern coast)
Central coast 268.8 545.9**
(189.7) (262.4)
Southern coast 3,779*** 3,770***
(225.5) (303.6)
Northern highlands 1,468*** 1,536***
(196.0) (275.2)
Central highlands 21.22 83.45
(167.0) (231.1)
Southern highlands 676.9*** 759.3***
(178.1) (249.9)
Amazon 577.4*** 900.9***
(155.8) (218.1)
Metropolitan Lima 5,152*** 6,000***
(187.1) (261.2)
Public healthcare (0, 1)1 667.5*** 1,933***
(105.0) (163.8)
Continued
12 M. A. Cruz Saco et al.

Table 3. Continued

Variables 2004–2021 2014–2021

(1) (2)

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Private healthcare (0, 1) 7,082*** 7,489***
(151.5) (219.6)
Earns contributory pension (0, 1) 7,122*** 6,560***
(200.8) (274.2)
Earns Pensión 65 (0, 1) 91.26 11.97
(146.4) (184.1)
Without bathroom services (0, 1) 1,323*** 1,115***
(115.4) (176.8)
Contributes to PPS (0, 1) 11,513*** 11,050***
(188.2) (243.0)
Contributes to ONP (0, 1) 3,148*** 2,883***
(160.7) (223.7)
Other pensions (0, 1) 8,092*** 8,991***
(315.0) (430.2)
Head of household (0, 1) 2,496*** 2,841***
(130.1) (177.8)
Receives private transfers (0, 1) 1,903*** 1,896***
(126.5) (193.1)
Political participation (0, 1) 13.48
(146.8)
Constant 10,976*** 13,450***
(513.3) (754.7)
Observations 121,793 76,565
R2 0.246 0.261

***P < 0.01,

**P < 0.05.
1
Public is either EsSalud (social security health care) or SIS (public health system).
Standard errors in parentheses.
Source: Authors’ elaboration based on household surveys, INEI (2022b).

The estimations consider two periods, 2004–2021 in column 1 and 2014–

2021 in column 2. The period 2004–2021 begins with the commodity “boom”
and ends with the most recent household survey in 2021. The 2014–2021 pe-
riod pertains to the economic slowdown after the “commodity boom” and
the introduction of two new variables in the household surveys. The first one
is “limited mobility” in Module 400, Salud (Health), and the second,
“political participation,” in Module 800, Participación Ciudadana
(Citizenship Participation).
Older Working Persons and the Gender Pay Gap 13

All significant coefficients in columns 1 and 2 have the expected signs. Age,
chronic disease (only in column 2), speaking a native language, being in a re-
lationship with a partner, having co-residents at home, living in the northern
and central highlands, having public healthcare, earning a contributory pen-

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sion, without bathroom services, and earning another pension are negatively
associated with labor income. These associations show that being older, hav-
ing an ethnic background, having a partner and co-residents, residing in less-
affluent regions, relying on public healthcare, and so forth, lower the work in-
come. Conversely, being educated and having more time on the job (experi-
ence) are positively associated with labor income as anticipated in any
Mincer-type model. Being a dependent worker, speaking a foreign language,
residing in the central coast, southern coast, southern highlands, the Amazon,
or Metropolitan Lima (ML), paying for private healthcare, and contributing
to a pension pillar (ONP or PPS) are positively associated with earnings from
work.
Estimation results regarding our gender variables are as follows. We confirm
the conceptual positive association between gender variables that proxy male au-
thority, “head of household” and “participating politically,” with higher earnings
(although “political participation” lacks significance). And we show that the gen-
der variable “receiving an intergenerational private transfer” is negatively associ-
ated with work income because an alternative stream of income reduces older
women’s incentive to earn higher pay. Therefore, the three gender norm varia-
bles pick up structural features of unequal gender power and exclusion in
Peruvian society.
We apply the O–B decomposition and estimate the gender mean labor in-
come difference that we call “D.” D is accounted for by three components, the
endowment effect (E), the coefficient effect (C), and the interaction compo-
nent (I) (Cruz Saco, Gil, and Campos 2022; Sharma 2017). E represents the
gender income difference that is due to disparities in regressors or endow-
ments by gender. C represents differences in coefficients of regressors, i.e.
endowments pertaining to each gender that have different impacts on earn-
ings. And finally, I represents the simultaneous interaction of E and C. If the
interaction term is negative, it decreases C, and vice versa.
Table 4 presents the O–B results for models with and without the gender vari-
ables (head of household, receives private transfers, and political participation)
for 2004–2021 and 2014–2021, respectively.
In 2004–2021, O–B yields a gender income gap of 68 percent that decreases
to approximately 62 percent in 2014–2021. When the gender variables are ex-
cluded, differences in endowments explain 46.1 percent and 53.8 percent of
the gender gap in each period. Conversely, when the gender variables are
added to pick up gender norms that favor men vis-à-vis women, the differen-
ces in endowments explain 69.2 percent and 80.7 percent of the gap. Hence,
these variables add 50 percent to the explained component. The estimation
works best for 2014–2021 and leaving a 19.3 percent unexplained component
14 M. A. Cruz Saco et al.

Table 4. O–B decomposition for men versus women mean labor income, 2004–2021 and
2014–20211

2004–2021 2014–2021

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Without With Without With
gender gender gender gender
variables variables variables variables

Difference (D) 0.677*** 0.684*** 0.619*** 0.630***

Due to endowment (E) 0.312*** 0.473*** 0.333*** 0.508***
Due to coefficient (C) 0.440*** 0.365*** 0.390*** 0.338***
Due to interaction (I) 0.0751***0.1541*** 0.104*** 0.2163***
Explained component,
Endowment as percent of total (E/D) 46.1 69.2 53.8 80.7
Unexplained component,
Discrimination as percent 53.9 30.8 46.2 19.3
of total (C þ I/D)

***P < 0.001.

1
N is 127,035 in 2004–2021 and 79,944 in 2014–2021.
Source: Authors’ elaboration based on household surveys, INEI (2022b).

that may originate in women’s discretion and preferences when deciding how
and when they wish to work, in some cases choosing jobs with lower earnings.

Geographic Heterogeneities
To assess the gender income gap using geographical aggregations, we apply
the O–B decomposition to (i) ML (fifty districts, the most modern, in a total
of 1,874 districts) and not-ML (1,824 districts in the rest of the Peruvian terri-
tory)3 and (ii) urban and rural areas over 2014–2021.4 Estimation results are
presented in table 5.
The income gender gap in ML is approximately 66 percent, and 63 percent
in not-ML. In urban areas, the gap is somewhat larger, close to 80 percent,
and in rural areas, it drops to 63 percent. Thus, gender inequity in urban areas
is the highest, which suggests that men find employment that remunerates
them at much higher levels than women nationally. A plausible explanation
for this result is the feminization of low-productivity occupations that are
wide-ranging in urban centers and the superior compensation of males in
high-productivity jobs.
Without the gender variables, variations in E explain 29 percent of the gap
in ML, 57 percent in not-ML, 48 percent in urban areas, and 47 percent in ru-
ral areas. When we introduce the gender variables, the explained component
E increases to 44 percent in ML, 91 percent in not-ML, 68 percent in urban
areas, and 91 percent in rural areas. Hence, the gender dimension has added
Older Working Persons and the Gender Pay Gap 15

Table 5. O–B decomposition for men versus women mean labor income in ML/not-ML
and in urban/rural areas, 2014–2021

ML Not-ML

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Without With Without With
gender gender gender gender
variables variables variables variables

N ¼ 79,944 6,961 6,961 72,983 72,983

Difference (D) 0.634*** 0.662*** 0.624*** 0.633***
Due to endowment (E) 0.184*** 0.288*** 0.354*** 0.578***
Due to coefficient (C) 0.504*** 0.444*** 0.403*** 0.381***
Due to Interaction (I) 0.0550** 0.0703 0.1334***0.3264***
Explained component,
Endowment as percent of total (E/D) 29.1 43.6 56.8 91.3
Unexplained component,
Discrimination as percent 70.9 56.4 43.2 8.7
of total (C þ I/D)

Urban Rural
Without With Without With
gender gender gender gender
variables variables variables variables

N ¼ 79,944 40,567 40,567 39,377 39,377

Difference (D) 0.786*** 0.803*** 0.624*** 0.630***
Due to endowment (E) 0.378*** 0.550*** 0.295*** 0.572***
Due to coefficient (C) 0.508*** 0.457*** 0.385*** 0.353***
Due to Interaction (I) 0.0991***0.2037***0.0559***0.2955***
Explained component,
Endowment as percent of total (E/D) 48.0 68.4 47.3 90.9
Unexplained component,
Discrimination as percent 52.0 31.6 52.7 9.1
of total (C þ I/D)
**P < 0.01,
***P < 0.001.
Source: Authors’ elaboration based on household surveys, INEI (2022b).

substantial explanation to the endowments, particularly in non-ML and rural

areas. In the latter, there is a 9 percent margin of the gender gap that needs to
be explained by other unobserved variables. The latter may include women’s
own labor preferences or other barriers that require further research. The low
explanatory power of standard regressors in ML may suggest that variables
other than training and experience, and demographic and socioeconomic var-
iables play out in determining the gender gap in pay in the most modern
16 M. A. Cruz Saco et al.

districts. Variables that are not included in the estimation of the gender gap
may include privilege due to relationships that help land jobs without profes-
sional credentials, favoritism, and compensation that is not commensurate

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with productivity and/or job descriptions.

Discussion of Findings
The average gender pay gap over 2004–2021 among older working persons
is 68 percent. This gender gap is much higher than the gender pay gap among
younger workers, in the age bracket fifteen to fifty-nine years, which was esti-
mated to be between 10 percent and 30 percent depending on the study in
question (Defensorıa del Pueblo 2019; Marchionni, Gasparini, and Edo 2018;
~
Nopo 2012; Urquidi and Chalup 2023; Vaccaro et al. 2022). As predicted by a
Mincer-type income model, labor earnings depend on educational attainment,
experience, and other standard socioeconomic and demographic variables.
Notably, variables representing gender norms augment the explained compo-
nent of the pay gender gap by capturing the impact of discrimination or ster-
eotyping. In the standard O–B decomposition of labor income, these variables
are not included, and therefore the unexplained portion is attributed to gen-
der exclusion, which has not been estimated with, for example, our proposed
methodology. Thus, an important finding of this article is that inclusion of
proxies representing gender culture and norms adds significance to the analy-
sis of the gender pay gap.
The distribution of the pay gap is commensurable, of the order of 60þ per-
cent, at the national level, in ML and not-ML and in rural areas. In urban
areas, however, the average gap is 80 percent, which suggests that the pay gap
increases given the large extent of simultaneous low- and high-productivity
occupations and feminization of low-productivity jobs.
Figure 1 shows the trend in 2004–2021 of the O–B gender gap, D, and the
endowment effect, E, as a proportion of D, E/D. The vertical left axis is the
size of the gap and the vertical right axis is E/D, i.e. the difference of the gap
that is explained by the endowments. In general, D increased over 2004–2010,
a period when the Peruvian economy realized high growth rates. Since 2010,
when D reached a peak of 91.9 percent, D declined. It was 53.7 percent in
2019, although it reversed in 2020 and 2021, presumably temporarily due to
the COVID-19 shock. At the same time, E/D has on average increased. This
trend provides evidence that gender variables as regressors capture the effect
of those factors that reduce women’s compensation, thus increasing the gen-
der gap. We confirm that said gender variables capture the attitudes and cul-
tural norms that lead to gender inequity. For this reason, they should be
incorporated as drivers of labor earnings. For comparison, we add the O–A
gender gap estimation in 2014–2021, which renders similar estimates.
Older Working Persons and the Gender Pay Gap 17

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Figure 1 O–B total difference, D, and endowment component, E, 2004–2021.

Source: Authors’ elaboration based on household surveys, INEI (2022b).

The gender pay gap contracted on average since 2010 but the trend was
interrupted by the COVID-19 pandemic. Determining whether COVID-19
created a short-lived or permanent reversal of the trend will require further in-
vestigation and an extended time horizon. It appears that higher educational
attainment and lower fertility rates will support older women’s participation
in the labor market with advances in their relative earnings. The evidence sup-
ports the proposition that as younger cohorts of older women participate in
the labor market, the gender pay gap decreases. To illustrate this proposition,
we look at two variables, illiteracy and fertility rates. In 2010, the female illiter-
acy rate among women in urban (rural) areas in the age group of fifteen to
forty-four years was 2.3 percent (17.1 percent); forty-five to fifty-nine years,
6.1 percent (37.6 percent); and sixty years and older, 15.7 percent (59.1 per-
cent). In 2020, the rates for the same age groups fell: fifteen to forty-four years
was 1.6 percent (9.6 percent), forty-five to fifty-nine years, 5 percent (26.2 per-
cent), and sixty years and older, 8.9 percent (38.8 percent) (INEI 2022e). As
can be seen, the educational attainment continues to improve although illiter-
acy rates are high in rural areas. Fertility rates have dropped substantially in
Peru. In 1950–1965, fertility rates were 6.9 percent; in 2020, this decreased to
1.9 percent, below the replacement rate (INEI 2022f). While there is a long
way to go to attain gender equity, it is apparent that continued progress in the
educational attainment, training, and experience of women, as well as their ac-
cess to healthcare, can begin to reverse gender inequity.
Figure 2 shows the evolution of the O–B gender gap estimates in ML and
not-ML (upper panels) and in urban and rural areas (lower panels) over
2014–2021 (in two-year averages). Both D and E are represented jointly using
18 M. A. Cruz Saco et al.

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Figure 2 ML/not-ML and urban/rural areas. O–B total difference, D, and endowment com-
ponent, E, 2014–2021.

Source: Authors’ elaboration based on household surveys, INEI (2022b).

the vertical left axis. In ML and in urban areas, the O–B gap decreased while
the trend of the gap in not-ML and rural areas has a kinked shape. In the lat-
ter, however, the model explains the difference effectively. In ML, the model is
less successful in estimating the explained portion of the gap due to the possi-
ble impact of nonlabor market factors such as relationships, favoritism, and
misalignment of compensation with productivity as was indicated earlier.

Conclusions and Questions for Future Research

Our findings show a large gender pay gap of 68 percent for older working
persons. With a conventional Mincer-type model, 46.1 percent of the gap is
explained by the traditional regressors. When the gendered norm variables are
added, 69.2 percent of the gap is explained. Hence, the explanatory compo-
nent improves by 50 percent. In 2014–2021, the aggregate gender gap is ap-
proximately 62 percent. The regressors, excluding gender norm variables,
explain 53.8 percent of the gap. This increases to 80.7 percent when gender
norm variables are included. Hence, we show that Mincer models can be en-
hanced with the addition of variables that reflect gender norms.
Older Working Persons and the Gender Pay Gap 19

An important finding is that the income gap among working persons sixty
years and older is larger than among younger workers as documented in
Marchionni, Gasparini, and Edo (2018), Urquidi and Chalup (2023), and
Vaccaro et al. (2022). Conceivably, the reason is that differences in training,

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experience, and gender cultural and social norms (endowments) were more
inequitable for older women in their youth and, as newer cohorts of older per-
sons work, the gender gap decreases.
We find a stronger gender inequity in urban areas where the gender gap is
80 percent, the highest. The estimation explains 69.4 percent of it. Our esti-
mated model has an enhanced predictability in not-ML and in rural areas.
The Mincer-type model for ML without gender variables explains 29.1 per-
cent of the gap. It increases to 43.6 percent with the gender variables. For the
geographical aggregations ML/not-ML and urban/rural areas, we find that the
models containing the gender variables explain 91.3 percent and 90.9 percent
of the gap. In both cases, improvement in the explained component is 60.7
percent and 72.5 percent, respectively, and leaves a small proportion to ac-
count for the unexplained pay gap. Other unobserved variables that are ex-
cluded from the estimation may add explanatory power to the gap.
Our results suggest some key questions for future research. First, a deeper
understanding of how the intersections of gender, ethnicity, sexuality, and so-
cial class affect the income gap in old age will provide clues on the heterogene-
ities of gender inequities by identity and support formulation of
interventions, leading to inclusive gender equity (Stark et al. 2005). For exam-
ple, we find that the pay gap is lowest for high-income older females who are
presumably as skilled and experienced as their male counterparts. At the same
time, the gap remains consistently high for low-income earners. This evidence
requires more nuanced analysis.
Second, identification of the drivers of the downward trend of the pay gap,
with attention to changes in persons’ skills, experience, demographics, and
other characteristics, will inform the formulation of specific training and fam-
ily support programs to attain gender equity (for example, subsidized child-
care and professional development programs, flexible working hours for
women, respite support for caregiving at home). It is also important to trace
how changes in cultural and social gender norms, if any, are affecting
discrimination.
Third, the identification of variables affecting labor income beyond the
standard regressors should be considered in future research. Some gap estima-
tions, after the addition of our three gender variables, show that the unex-
plained portion is nontrivial. Factors may include women’s preferences,
personal relationships with employers, overcompensation of male work or
nonmarket employment practices, among others, that need to be analyzed.
Finally, we suggest an impact evaluation of the COVID-19 pandemic on
the gender pay gap. Such assessment would determine if the reversal of the
gap in 2020 and 2021 was temporary.
20 M. A. Cruz Saco et al.

Recommendations
Unsurprisingly, gender inequity among older persons is influenced by the
political and economic structures sustaining the exclusion and subordination

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of women at home and in the workforce. As expected, discrimination in youth
leads to gender inequity in old age. The destructuring of power dynamics in
the household can begin with renegotiation of domestic responsibilities
among partners and coresidents. The latter should be supported with subsi-
dies for caregiving (Beltrán and Lavado 2014), securing systems for early
childhood day-care, flexible working hours, employer and government contri-
butions to social protection schemes during maternity leaves, and bonuses for
children (Beltrán, Cruz Saco, and Pérez 2021; Cruz Saco and Pérez 2020; Cruz
Saco, Gil, and Campos 2022). Girls and women’s educational advancement
and training as well as elimination of gender-based violence should become
an immediate effective public policy priority.
Another key recommendation to address income insecurity in old age is
expanding the coverage of the social pension, Pensión 65, to older persons
who do not earn a contributory pension with a livable public transfer. That
means that the number of beneficiaries should increase from 580,000 to 1.4
million older persons. The value of the monthly social pension should be set
equal to or above the monthly poverty line, which is defined by the cost of a
basic consumption basket for one person. Presently, the value of this basic
consumption basket is S.378 or US$100. Hence, the social pension should in-
crease from the current bimonthly level of $80 to $200. The fiscal impact of
expanding the social pension would double from approximately 0.14 percent
of GDP to 0.30 percent of GDP (Cruz Saco and Gil 2021). Evidently, extend-
ing Pensión 65 is particularly suited to the Peruvian economy because of its
excessively large unregistered employment, feminization of low-productivity
jobs, and the faltering of the pension system.
We agree with the comprehensive proposal submitted by Nopo, ~ Hidalgo,
and Véliz (2021) for the adoption of a gender approach to labor legislation
and the creation of incentives for hiring women. As a final point, we request
that government and civil society uphold the International Labour
Organization conventions on gender equality and the recommendations ema-
nating from the Madrid Plan of Action (UN 2002) on ensuring human rights
and the promotion of the well-being of older persons.

Notes
1. We adopt the Peruvian National Institute of Statistics definition of older
persons as individuals sixty years of age and older.
2. The official retirement age is sixty-five years for both genders; however,
under certain conditions, it is possible to retire earlier.
Older Working Persons and the Gender Pay Gap 21

3. ML includes the provinces of Lima (forty-three districts) and Callao

(seven districts). These districts can be either urban or rural areas. One
third of the Peruvian population resides in ML (INEI 2022g).

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4. An urban area (town or settlement) has at least 2,000 residents. Capitals of
districts are considered urban areas even when they may not fit the defini-
tion. Hence, the latter may be heterogeneous because capitals of depart-
ments and small capitals of districts that are more rural than urban may be
included. A Rural area has between 500 and less than 2,000 residents.

Acknowledgments
We are grateful to anonymous referees for their helpful comments as well as to
Joanna Richards, Adrian Melendez-Cooper, Ariella Rotramel, Leda Pérez, Eva Paus,
Favio Leiva, and Cynthia Sanborn. We thank feedback from participants at the
Gender and Development-1 panel, LACEA-LAMES 2022 Annual Meeting in Lima.

Funding
The present research project was not externally funded.

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