Pay and Grade Differentialsat the World Bank 1912. Neither omitted-variable bias nor quotas imposed to ensure diversity are compelling explanations for remaining differentials in salary and grade.
Discrimination is likely to explain some of the remainder.
Large international organizations such as the World Bank pursue many objectives in hiring policies, including reduced costs, cultural diversity, and the avoidance of discrimination. There can be sharp tradeoffs between these objectives. Diversity is enhanced by recruiting from an international labor market, for example, but international organizations face unusually large differences in reservation wages for staff capable of doing the same work. One way to reduce costs would be to pay employees their reservation wages, which implies unequal pay for equal work, or discrimination. Filmer, Grosh, King, and van de Walle show how these tradeoffs are resolved in the World Bank's hiring processes.