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Earnings Differential between Public and Private Sectors in Pakistan

  • Zafar Mueen Nasir

    (Pakistan Institute of Development Economics, Islamabad.)

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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File URL: http://www.pide.org.pk/pdf/PDR/2000/Volume2/111-130.pdf
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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. 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.
  2. 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.
  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. 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.
  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. 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.
  7. 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.
  8. 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.
  9. 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.
  10. 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.
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