An Empirical Investigation Of The Determinants Of Wage Differentials In Nigeria

ABSTRACT

This study examines the determinants of wage differential in Nigeria. The contribution of

wage differential or inequality to total income inequality in Nigeria cannot be underestimated.

This goes without saying that the gross income inequality reckoned in Nigeria

could be reduced by tackling the wages disparity. To do this, the study designs three main

objectives; to ascertain the impact of education and experience on wage differential in

Nigeria, to ascertain the relationship that wage have with experience and education in Nigeria

and to analyse income inequality with respect to socioeconomic characteristics namely; sex,

state and sector in Nigeria. The study therefore employs the instrumental variable approach

with the aid of the General Household Survey (GHS) Data (2019) to ascertain the above

stated objectives. The result suggests that education, experience and potential experience are

significant determinants of wages rates and hence significant contributors to wages

differential. Amongst the socio-economic characteristics the result suggests that location and

sex are non-significant determinants of wage rates. While marital status is a significant

determinant of wage rates and hence significantly influences wage differentials.

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