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Wage Inequality in Pakistan: How Does Contract Status Matter?

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  • Thanh Tam Nguyen-Huu

    (Métis Lab EM Normandie - EM Normandie - École de Management de Normandie)

Abstract

This research investigates the wage gap associated with contract status in Pakistan. The estimation shows that holding a fixed-term written contract (FTC) or no written contract (NWC) instead of a long-term written contract could significantly reduce wages for Pakistani workers. However, the extent of wage inequality depends on how defining contract status. If we rely on the Pakistani national definition of FTC, engaging in an FTC is likely to suffer the highest penalty in terms of hourly wage. Such a finding no longer holds once the international standard definition of FTC is considered. Besides, the wage gaps associated with contract status change if we refer to monthly wage as the independent variable instead of hourly wage. The self-selection into wage workers and endogeneity associated with contract status are carefully taken into account.

Suggested Citation

  • Thanh Tam Nguyen-Huu, 2023. "Wage Inequality in Pakistan: How Does Contract Status Matter?," Post-Print hal-04248144, HAL.
    • Handle: RePEc:hal:journl:hal-04248144
    DOI: 10.1353/jda.2023.0003
    Note: View the original document on HAL open archive server: https://hal.science/hal-04248144
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    References listed on IDEAS

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