Recently there has been growing interest in the relationship between cognitive and non cognitive abilities and labor market outcomes. A large literature provides evidence on the positive connection between gaps in abilities and gaps in wages between men and women. However, attention is focused on developed countries. The main objective of this paper is to identify latent abilities and explore their role in the gender wage gap in Peru. The main identification strategy relies on exploiting panel data information on test scores and arguing that time dependence across measures is due to latent abilities. Results show a significant gender wage gap in Peru and that even though when accounting for measured abilities differences in non cognitive abilities seem irrelevant, when accounting for diferences in actual latent ability non cognitive abilities account for important inter-gender differences in the endowment and returns of abilities. Moreover, inter-gender differences in latent abilities play an important role not only in wage profiles, but in schooling, employment and occupation decisions.