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Earnings Differential between Public and Private Sectors in Pakistan

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  • Zafar Mueen Nasir

    (Pakistan Institute of Development Economics, Islamabad.)

Abstract

The paper explores the earnings differential between public and private sectors in Pakistan. The private sector is further divided into formal and informal sectors for comparison purposes. It utilises an expanded version of the human capital model to determine important determinants of earnings in each sector. Using standard technique, the earnings are decomposed into two parts, i.e., differential due to personal characteristics and due to earnings structure of the particular sector. The Labour Force Survey 1996-97 is used for the analysis of wage differential. Results indicate that workers in public sector earn more than both private formal as well as informal sector workers. These earnings are higher due to their superior personal human capital endowment; however, the wage structure of the public sector is not helping them. The informal sector workers are earning lower than both public sector and private formal sector workers due to both personal characteristics and wage structure of the informal sector.

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Bibliographic Info

Article provided by Pakistan Institute of Development Economics in its journal The Pakistan Development Review.

Volume (Year): 39 (2000)
Issue (Month): 2 ()
Pages: 111-130

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Handle: RePEc:pid:journl:v:39:y:2000:i:2:p:111-130

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  1. M. Afzal & Zafar Moeen Nasir, 1987. "Is Female Labour Force Participation Really Low and Declining in Paotan? A look at Alternative Data Sources," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 26(4), pages 699-709.
  2. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
  3. Kenny, Lawrence W, 1983. "The Accumulation of Human Capital during Marriage by Males," Economic Inquiry, Western Economic Association International, vol. 21(2), pages 223-31, April.
  4. Lindauer, David L. & Sabot, Richard H., 1983. "The public/private wage differential in a poor urban economy," Journal of Development Economics, Elsevier, vol. 12(1-2), pages 137-152.
  5. Birdsall, Nancy & Fox, M Louise, 1985. "Why Males Earn More: Location and Training of Brazilian Schoolteachers," Economic Development and Cultural Change, University of Chicago Press, vol. 33(3), pages 533-56, April.
  6. Javed Ashraf & Birjees Ashraf, 1993. "An Analysis of the Male-Female Earnings Differential in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 32(4), pages 895-904.
  7. Malkiel, Burton G & Malkiel, Judith A, 1973. "Male-Female Pay Differentials in Professional Employment," American Economic Review, American Economic Association, vol. 63(4), pages 693-705, September.
  8. Greenhalgh, Christine A, 1980. "Male-Female Wage Differentials in Great Britain: Is Marriage an Equal Opportunity?," Economic Journal, Royal Economic Society, vol. 90(363), pages 751-75, December.
  9. Sharon P. Smith, 1976. "Pay differential between federal government and private sector workers," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 29(2), pages 179-197, January.
  10. Morley Gunderson, 1979. "Earnings Differentials between the Public and Private Sectors," Canadian Journal of Economics, Canadian Economics Association, vol. 12(2), pages 228-42, May.
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Citations

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Cited by:
  1. Mohammad, Irfan, 2000. "Youth employment and unemployment in Pakistan - an overview of 1990's," MPRA Paper 38154, University Library of Munich, Germany.
  2. Aslam, Monazza & Kingdon, Geeta, 2009. "Public-private sector segmentation in the Pakistani labour market," Journal of Asian Economics, Elsevier, vol. 20(1), pages 34-49, January.
  3. Hasan, Syed Akif & Subhani, Muhammad Imtiaz & Osman, Ms. Amber, 2012. "Disparity in the structure of wages in Pakistan," MPRA Paper 37664, University Library of Munich, Germany.
  4. Nasir, Zafar Mueen & Iqbal, Nasir, 2010. "Employers Size Wage Differential: Does Investment in Human Capital Matter?," MPRA Paper 27164, University Library of Munich, Germany.
  5. Mohammad, Irfan, 1999. "Skills development and competitiveness - the role of HRD," MPRA Paper 38379, University Library of Munich, Germany.
  6. Muhammad Irfan, 2010. "A Review of the Labour Market Research at PIDE 1957-2009," PIDE Books, Pakistan Institute of Development Economics, number 2010:1 edited by Rashid Amjad & Aurangzeb A. Hashmi, June.
  7. Asma Hyder & Barry Reilly, 2005. "The Public and Private Sector Pay Gap in Pakistan: A Quantile Regression Analysis," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 44(3), pages 271-306.
  8. Syed Kanwar Abbas & Asad Zaman, 2005. "Efficiency Wage Hypothesis—The Case of Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 44(4), pages 1051-1066.
  9. Zafar Mueen Nasir, 1999. "Do Private Schools Produce More Productive Workers?," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 38(4), pages 937-954.
  10. Shabbar Jaffry & Yaseen Ghulam & Vyoma Shah, 2006. "Inter-industry Wage Differentials in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 45(4), pages 925-946.
  11. Asma Hyder & Barry Reilly, 2005. "The Public Sector Pay Gap in Pakistan: A Quantile Regression Analysis," PRUS Working Papers 33, Poverty Research Unit at Sussex, University of Sussex.

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