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The Public and Private Sector Pay Gap in Pakistan: A Quantile Regression Analysis

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Author Info

  • Asma Hyder

    (NUST Institute of Management Sciences, Rawalpindi.)

  • Barry Reilly

    (Department of Economics, University of Sussex, UK.)

Abstract

This paper examines the magnitude of public/private wage differentials in Pakistan using data drawn from the 2001-02 Pakistan Labour Force Survey. As in many other countries, public sector workers in Pakistan tend both to have higher average pay and education levels as compared to their private sector counterparts. In addition, the public sector in Pakistan has both a more compressed wage distribution and a smaller gender pay gap than that prevailing in the private sector. Our empirical analysis suggests that about two-fifths of the raw differential in average hourly wages between the two sectors is accounted for by differentials in average characteristics. The estimated public sector mark-up, ceteris paribus, is of the order of 49 percent and is substantial by the standards of developed economies. The quantile regression estimates suggest that the mark-up was found to decline monotonically with movement up the conditional wage distribution. In particular, the premium at the 10th percentile was estimated at 92 percent as compared to a more modest 20 percent at the 90th percentile.

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Bibliographic Info

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

Volume (Year): 44 (2005)
Issue (Month): 3 ()
Pages: 271-306

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Handle: RePEc:pid:journl:v:44:y:2005:i:3:p:271-306

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References

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Citations

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Cited by:
  1. Paul Miller, 2009. "The Gender Pay Gap in the US: Does Sector Make a Difference?," Journal of Labor Research, Springer, vol. 30(1), pages 52-74, March.
  2. Hyder, Asma, 2007. "Wage Differentials, Rate of Return toEducation, and Occupational WageShare in the Labour Market of Pakistan," MPRA Paper 2224, University Library of Munich, Germany.
  3. 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.
  4. Bilquees, Faiz, 2006. "Civil Servants’ Salary Structure," MPRA Paper 2245, University Library of Munich, Germany.
  5. Hasan, Dr. 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.
  6. Raquel Rangel de Meireles Guimarães & Luisa Pimenta Terra & Anna Carolina Martins Pinto & Cibele Comini César, 2010. "Diferenciais Regionais No Retorno À Participação No Setor Público No Brasil, 2005," Anais do XIV Seminário sobre a Economia Mineira [Proceedings of the 14th Seminar on the Economy of Minas Gerais], in: Anais do XIV Seminário sobre a Economia Mineira [Proceedings of the 14th Seminar on the Economy of Minas Gerais] Cedeplar, Universidade Federal de Minas Gerais.
  7. Barry Reilly & T. Hung Pham, 2006. "The Gender Pay Gap In Vietnam, 1993-2002: A Quantile Regression Approach," PRUS Working Papers 34, Poverty Research Unit at Sussex, University of Sussex.
  8. Arsalan SHOEBY & Faisal SALEEM & Ambreen RAZZAQ & Naveed R. KHAN, 2012. "Link Of Satisfaction Commitment And Performance On Faculty Members’ Performance At Higher Education Institutions In Pakistan," Management and Marketing Journal, University of Craiova, Faculty of Economics and Business Administration, vol. 0(2), pages 223-232, November.
  9. Zafar Mueen Nasir & Nasir Iqbal, 2009. "Employers Size Wage Differential: Does Investment in Human Capital Matter?," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 48(4), pages 509–521.
  10. Mizala, Alejandra & Romaguera, Pilar & Gallegos, Sebastián, 2011. "Public–private wage gap in Latin America (1992–2007): A matching approach," Labour Economics, Elsevier, vol. 18(S1), pages S115-S131.
  11. 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.
  12. Faiz Bilquees, 2006. "Civil Servants’ Salary Structure," PIDE-Working Papers 2006:4, Pakistan Institute of Development Economics.

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