Wage Differentials, Rate of Return toEducation, and Occupational WageShare in the Labour Market of Pakistan
AbstractThis paper examines the magnitude of public/private wage differentials in Pakistan using data drawn from the 2001-02 Labour Force Survey. Pakistan Labour Force Survey is a nationwide survey containing micro data from all over the country containing demographic and employment information. As in many other countries, public sector workers in Pakistan tend to have higher average pay and educational levels as compared to their private sector counterparts. First, this paper presents the inter-sectoral earning equations for the three main sectors of the economy, i.e., public, private, and state-owned enterprises. These results are further decomposed into “treatment” and “endowment effect”. To examine the role of human capital in wage gap, the rate of return to different levels of schooling is calculated. These rates of return to education may be important for policy formulation. The relative earning share is also worked out to look into the distribution of wages across the occupational categories. The earning equations are estimated with and without correction for selectivity, which is also the main objective of the study, i.e., to find out if any non-random selection is taking place within these three sectors of employment.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 2224.
Date of creation: 2007
Date of revision:
Wage Differentials; Rate of Return to Education; Public Sector; Labour Markets;
Other versions of this item:
- Asma Hyder, 2007. "Wage Differentials, Rate of Return to Education, and Occupational Wage Share in the Labour Market of Pakistan," PIDE-Working Papers 2007:17, Pakistan Institute of Development Economics.
- Asma Hyder, 2007. "Wage Differentials, Rate of Return to Education, and Occupational Wage Share in the Labour Market of Pakistan," Labor Economics Working Papers 22197, East Asian Bureau of Economic Research.
- J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Private Pensions
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-03-17 (All new papers)
- NEP-CWA-2007-03-17 (Central & Western Asia)
- NEP-DEV-2007-03-17 (Development)
- NEP-EDU-2007-03-17 (Education)
- NEP-LAB-2007-03-17 (Labour Economics)
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