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

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Author Info
Asma Hyder () (National Institute of Management Sciences, National University of Science & Technology, Pakistan)
Barry Reilly (Poverty Research Unit at Sussex, Department of Economics, University of Sussex)

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Abstract

This paper examines the magnitude of public/private wage differentials in Pakistan using data drawn from the 2001/02 Labour Force Survey. As in many other countries, public sector workers in Pakistan tend both to have higher average pay and education levels 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 by differentials in average characteristics. The estimated ceteris paribus public sector ‘mark-up’ is of the order of 49% 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% compared to a more modest 20% at the 90th percentile.

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Paper provided by Poverty Research Unit at Sussex, University of Sussex in its series PRUS Working Papers with number 33.

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Length: 41 pages
Date of creation: Jul 2005
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Handle: RePEc:pru:wpaper:33

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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Budria, Santiago, 2006. "Schooling and the distribution of wages in the european private and public sectors," MPRA Paper 90, University Library of Munich, Germany. [Downloadable!]
  2. Patrinos, Harry Anthony & Ridao-Cano, Cris & Sakellariou, Chris, 2006. "Estimating the returns to education : accounting for heterogeneity in ability," Policy Research Working Paper Series 4040, The World Bank. [Downloadable!]
  3. Gorodnichenko, Yuriy & Sabirianova, Klara, 2006. "Public Sector Pay and Corruption: Measuring Bribery from Micro Data," CEPR Discussion Papers 5585, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  4. Julie Litchfield & Thomas McGregor, 2008. "Poverty in Kagera, Tanzania: Characteristics, Causes and Constraints," PRUS Working Papers 42, Poverty Research Unit at Sussex, University of Sussex. [Downloadable!]
  5. Gabriela Miranda Moriconi & João S. Moura Neto & Nelson Marconi & Paulo Roberto Arvate, 2006. "Evidências Sobre O Comportamento Dos Governos Estaduais Na Determinação Dos Salários Dos Servidores Públicos No Brasil," Anais do XXXIV Encontro Nacional de Economia [Proceedings of the 34th Brazilian Economics Meeting] 135, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics]. [Downloadable!]
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