Determinants of wages: Evidence from Nigeria

The structure of the labor market has a significant consequence on employment status which indirectly also serves as an important determinant of household income and welfare. Hence this research work explored the determinants of wages and degree of wage inequality with respect to gender, education, experience, religion, and public versus private and self- employed versus private sectors using a recent survey data of Nigeria General Household Survey (GHS) provided by the National Bureau of statistics (NBS) conducted in 2010-2011 on 5,000 households from all states. Using the Mincer type wage equation on the return to education and experience, our findings show that men earn less than women by 16.1 percent at all levels of education which gave similar results in the extended specifications. The coefficient for experience variable is very small which is 0.35 percent and not significant at conventional levels. This finding means that on-the-job training plays no significant role in wage determination. Similarly, self-employed earn 16.4 percent less than other employment categories in the rural area while the dummy for religion is highly significant showing that Christians earn 23 percent higher than the base category in the model. While the wage differential is constant at all levels of education for the whole country, it waries with level of education for the rural area, gender gap increasing at higher levels of education in favor of females. Keywords: SAP, wage gap, employment category.