Employers Size Wage Differential: Does Investment in Human Capital Matter?
Wage differential due to employer size is one of the key areas of interest in labour market research because a strong positive relationship between employer size and wages has been observed in developed and developing countries. It is, however, relatively neglected area of research in Pakistan. The purpose of present study is to investigate the employer size wage differential by looking at human capital factors. The study is based on standard methodology and estimates earning functions on Labour Force Survey (LFS) data for year 2007-08. Results clearly show that human capital investment has a bigger role in determining wages in the larger firms as compared to smaller firms. The main policy implications emanating from the analysis are the higher investment in skill which increases opportunities for workers in the labour market for higher wages and for jobs with good characteristics especially in large sized firms. The government policy towards education and skill formation needs serious reforms and better allocation of funds so that people get chance to enhance their skill level hence wages.
Volume (Year): 48 (2009)
Issue (Month): 4 ()
|Contact details of provider:|| Postal: P.O.Box 1091, Islamabad-44000|
Web page: http://www.pide.org.pk
More information through EDIRC
References listed on IDEAS
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.:
- Schmidt, Christoph M & Zimmermann, Klaus F, 1991.
"Work Characteristics, Firm Size and Wages,"
The Review of Economics and Statistics,
MIT Press, vol. 73(4), pages 705-710, November.
- Christoph M. Schmidt & Klaus F. Zimmerman, 1990. "Work Characteristics, Firm Size and Wages," Working Papers 644, Princeton University, Department of Economics, Industrial Relations Section..
- Lockheed, Marlaine E & Jamison, Dean T & Lau, Lawrence J, 1987. "Farmer Education and Farm Efficiency: Reply," Economic Development and Cultural Change, University of Chicago Press, vol. 35(3), pages 643-644, April.
- Rene Morissette, 1993. "Canadian Jobs and Firm Size: Do Smaller Firms Pay Less?," Canadian Journal of Economics, Canadian Economics Association, vol. 26(1), pages 159-174, February.
- Lockheed, Marlaine E & Jamison, Dean T & Lau, Lawrence J, 1980. "Farmer Education and Farm Efficiency: A Survey," Economic Development and Cultural Change, University of Chicago Press, vol. 29(1), pages 37-76, October.
- Thierry Lallemand & Robert Plasman & François Rycx, 2005. "Why do large firms pay higher wages? evidence from matched worker-firm data," ULB Institutional Repository 2013/8743, ULB -- Universite Libre de Bruxelles.
- C. Jeffrey Waddoups, 2007. "Employer Size-wage Effects in Australia," LABOUR, CEIS, vol. 21(4-5), pages 809-835, December.
- Blanca Zuluaga, 2007. "Different Channels Of Impact Of Education On Poverty: An Analysis For Colombia," BORRADORES DE ECONOMÍA Y FINANZAS 002351, UNIVERSIDAD ICESI.
- Blanca Zuluaga, 2007. "Different channels of impact of education on poverty: an analysis for Colombia," Working Papers Department of Economics ces0702, KU Leuven, Faculty of Economics and Business, Department of Economics.
- Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters,in: Schooling, Experience, and Earnings, pages 1-4 National Bureau of Economic Research, Inc.
- Nasir Iqbal & Masood Sarwar Awan, 2015. "Determinants of Urban Poverty: The Case of Medium Sized City in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 54(4), pages 719-738.
- Masood Sarwar Awan & Nasir Iqbal, 2010. "Determinants of Urban Poverty : The Case of Medium Sized City in Pakistan," Development Economics Working Papers 22827, East Asian Bureau of Economic Research.
- Masood Sarwar Awan & Nasir Iqbal, 2010. "Determinants of Urban Poverty: The Case of Medium Sized City in Pakistan," PIDE-Working Papers 2010:60, Pakistan Institute of Development Economics.
- Pugel, Thomas A, 1980. "Profitability, Concentration and the Interindustry Variation in Wages," The Review of Economics and Statistics, MIT Press, vol. 62(2), pages 248-253, May.
- Oi, Walter Y, 1983. "Heterogeneous Firms and the Organization of Production," Economic Inquiry, Western Economic Association International, vol. 21(2), pages 147-171, April.
- Yih-chyi Chuang & Pi-fum Hsu, 2004. "The Employer Size-Wage Differentials in Taiwan," Small Business Economics, Springer, vol. 23(4), pages 285-297, November.
- Hungerford, Thomas & Solon, Gary, 1987. "Sheepskin Effects in the Returns to Education," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 175-177, February.
- Haroon Jamal, 2005. "In Search of Poverty Predictors: The Case of Urban and Rural Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 44(1), pages 37-55.
- Rebick Marcus E., 1993. "The Persistence of Firm-Size Earnings Differentials and Labor Market Segmentation in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 7(2), pages 132-156, June.
- Zafar Mueen Nasir, 2000. "Earnings Differential between Public and Private Sectors in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 39(2), pages 111-130.
- Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-444, June.
- Sarfraz K. Qureshi & G. M. Arif, 2001. "Profile of Poverty in Pakistan, 1998-99," MIMAP Technical Paper Series 2001:05, Pakistan Institute of Development Economics.
- 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.
- Main, Brian G M & Reilly, Barry, 1993. "The Employer Size-Wage Gap: Evidence for Britain," Economica, London School of Economics and Political Science, vol. 60(238), pages 125-142, May.
- Gary S. Becker, 1975. "Human Capital: A Theoretical and Empirical Analysis, with Special Reference to Education, Second Edition," NBER Books, National Bureau of Economic Research, Inc, number beck75-1, 01.
- Zafar Mueen Nasir & Hina Nazli, 2000. "Education And Earnings In Pakistan," PIDE-Working Papers 2000:177, Pakistan Institute of Development Economics. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:pid:journl:v:48:y:2009:i:4:p:509-521. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Khurram Iqbal)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.