Page 88 - Azerbaijan State University of Economics

Zahra Huseynova: The Correlation Between Gender Pay GAP AND GDP Growth In Azerbaijan Economy

In the paper, we also used some control independent variable for against bias or other
problems. The first control variable is literacy ratio of males to females. This number
is acquired by dividing one variable to another. First is primary school completion
rate for males as percentage of male population in given year and the second is female
primary school completion rate as percentage of total female population. The data is
obtained from The State Statistical Committee of the Republic of Azerbaijan, MDG
indicators of the Republic of Azerbaijan.

The last variable Gini Index for Azerbaijan. Gini coefficient is discovered by Italian
statistician Corrado Gini in 1912. The index is used to measure income distribution in
the given society so, the number shows inequality rate in the country. The graphical
representation of coefficient is demonstrated by the help of Lorenz curve where flatter
curve means more inequality. The coefficient varies among 0 and 100% or 0 and 1.
While 0 presents perfect equality, 1 shows perfect inequality so, high coefficient
means high inequal distribution of income (Westfall, 2020). In our analysis, we get
Gini Coefficient from Trading Economics which also refer to World Bank
estimations. However, our data regarding Gini coefficient suffers from missing data
which might affect the results.

Additionally, for our main variables we added literacy rate gap for adult population to
look correlation between wage gap and them separately, which again is provided by
World Bank's World Development Indicators database.

METHODOLOGY
For the regression analysis we referred to the methodology conducted by Sherri Haas
(2006) but with some modifications. The regression equation and explanation of
variable are given below:

wage = β0 + β1 lgdp + β2 literacy + β3 gini + β4 year + u

Table 3: Explanation of variables
Variables Explanation
wage wage ratio of male and female workers
year 1991-2020
literacy literacy rate of male to female population
lgdp logarithm of real GDP per capita
gini gini (inequality)coefficient
Source: The author

88