Earnings function in Lebanon: does religion matter?

ABSTRACT

This paper aims to study the wage gap among religions in Lebanon using a random sample. The advantage of using Lebanon as a case is due to its historical diversification. This case excludes any impact of culture, language and immigration. The article uses multiple regression analysis, the Oaxaca-Blinder decomposition, and the quantile distribution regressions to study the wage gap. The signs of our estimated coefficients are as expected. The results show a significant wage gap for Sunnis, and Shias compared to Maronites. Furthermore, we find that the place of work has a significant impact on earnings. The religion wage gap vanishes if a Shia worker is working in Beirut or in the Eastern suburb; or if a Sunni is working in the Eastern Suburb. Finally, the paper shows that the gap is larger in the case of males for Sunnis, but not for Shias.

KEYWORDS:

• Religion
• wage gap
• unexplained gap
• human capital
• quantile regression

JEL CLASSIFICATION:

• J16
• J24
• J31
• J70
• Z12.

Acknowledgments

I would like to add the following acknowledgement para graph:The author appreciates the comments of Paul Makdissi and three anonymous referees. The gratitude is extended to the University of Arts and Sciences in Lebanon (USAL) for its continuous support. Special thanks go to Ali Dirani and Tony Rouhana for their help, and to Fadwa Murdaa, Zeinab Hamade, and Dima Hakim for helping in English Editing.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

¹ Indeed, Pope Jean Paul II, when speaking about Lebanon, stated that ‘rich, centuries-old tradition of collaboration between Christians and Muslims in that country’ (Paul 1994).

² Even if Muslims (Sunnis or Shias) are not a minority in Lebanon, a female Muslim may find herself (or at least, believes that she is) being discriminated against. See, for instance, (Khalaf 2020) and also (Lewis and Redd 2020).

³ The public sector in Lebanon is strongly corrupt. On top of political connections, regional connections and bribery can play a role in public service. Such factors are beyond the scope of this paper.

⁴ Indeed, (Faour 2007) states that Lebanon is the only country in the United Nations that has not conducted a national census since WWII.

⁵ Further information about these variables can be obtained from the authors upon request.

⁶ The data was collected before the Lebanese currency crisis. At that time, the Lebanese Pound (LBP) was pegged to the US dollar and the exchange rate was allowed to float between a narrow range [LBP1500, LBP1515].

⁷ Unfortunately, no detailed official statistics are available for comparison.

⁸ It is important to note here that we have tried to add other available variables in our regressions such as the working field, highest degree, and weekly hours without any significant difference in the results.

⁹ One may argue that there could be some poor enclaves in the Eastern Suburb. However, it is unlikely that a Sunni worker will accept to work in a remote place unless the job there is well paid.

¹⁰ This is known in Lebanon by the rule of ‘six and six multiplied’, which means literarily that for every six jobs assigned for Muslims; six others should be assigned to Christians.