The gender wage gap has long been a critical aspect of gender inequality. The issue is even more crucial for countries such as Nepal, where there are significant differences between men and women in educational attainment levels. This study investigates how educational attainment affects occupational choice for men and women in urban and rural areas. The result shows that females in rural areas have difficulty finding regular work even when their educational attainment level is controlled, compared with males and urban females. In addition, our decomposition results show that regular female workers in rural areas face a large wage gap owing to gender discrimination effects. These results indicate that, despite high education levels on par with males or urban females, rural females have fewer opportunities to find regular work and face significant wage discrimination. This may explain the perceived low incentives in educating girls in rural Nepal. This study contributes to the literature on gender wage gap by expanding the analysis to regular and casual labor markets and to urban and rural areas. (c) 2019 Elsevier Inc. All rights reserved.