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

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  • 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)

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.

Suggested Citation

  • Asma Hyder & Barry Reilly, 2005. "The Public Sector Pay Gap in Pakistan: A Quantile Regression Analysis," PRUS Working Papers 33, Poverty Research Unit at Sussex, University of Sussex.
    • Handle: RePEc:pru:wpaper:33
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    3. Dileni Gunewardena & Darshi Abeyrathna & Amalie Ellagala & Kamani Rajakaruna & Shobana Rajendran, 2008. "Glass Ceilings, Sticky Floors or Sticky Doors? A Quantile Regression Approach to Exploring Gender Wage Gaps in Sri Lanka," Working Papers PMMA 2008-04, PEP-PMMA.
    4. 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 Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    5. 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.
    6. Raquel Rangel de Meireles Guimarães & Luisa Pimenta Terra & Anna Carolina Martins Pinto & Cibele Comini César, 2010. "Diferenciais Regionais No Retorno À Participação No Setor Público No Brasil, 2005," Anais do XIV Semin·rio sobre a Economia Mineira [Proceedings of the 14th Seminar on the Economy of Minas Gerais], in: Anais do XIV Seminário sobre a Economia Mineira [Proceedings of the 14th Seminar on the Economy of Minas Gerais], Cedeplar, Universidade Federal de Minas Gerais.
    7. Tasnim Khan & Fatima Yousaf, 2013. "Unemployment Duration of First Time Job Seekers: A Case Study of Bahawalpur," Asian Journal of Economic Modelling, Asian Economic and Social Society, vol. 1(1), pages 8-19, December.
    8. Harry Patrinos & Cristobal Ridao-Cano & Chris Sakellariou, 2009. "A note on schooling and wage inequality in the public and private sector," Empirical Economics, Springer, vol. 37(2), pages 383-392, October.
    9. Vladimir Gimpelson & Anna Lukiyanova & Anna Sharunina, 2015. "Estimating the Public-Private Wage Gap in Russia: What Does Quantile Regression Tell Us?," HSE Working papers WP BRP 104/EC/2015, National Research University Higher School of Economics.
    10. Aslam, Monazza & Kingdon, Geeta, 2009. "Public-private sector segmentation in the Pakistani labour market," Journal of Asian Economics, Elsevier, vol. 20(1), pages 34-49, January.
    11. Mizala, Alejandra & Romaguera, Pilar & Gallegos, Sebastián, 2011. "Public–private wage gap in Latin America (1992–2007): A matching approach," Labour Economics, Elsevier, vol. 18(S1), pages 115-131.
    12. Tansel, Aysit & Keskin, Halil Ibrahim & Ozdemir, Zeynel Abidin, 2020. "Public-private sector wage gap by gender in Egypt: Evidence from quantile regression on panel data, 1998–2018," World Development, Elsevier, vol. 135(C).
    13. Alejandra Mizala & Pilar Romaguera & Sebastian Gallegos, 2010. "Public-Private Wage Gap In Latin America (1999-2007): A Matching Approach," Documentos de Trabajo 268, Centro de Economía Aplicada, Universidad de Chile.
    14. Asma Hyder, 2007. "Employment Preferences and Length of Job Queues in Pakistan," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 1(4), pages 383-401, December.
    15. Zheng Fang & Chris Sakellariou, 2015. "Glass Ceilings versus Sticky Floors: Evidence from Southeast Asia and an International Update," Asian Economic Journal, East Asian Economic Association, vol. 29(3), pages 215-242, September.
    16. Asma Hyder, 2007. "Preference for Public Sector Jobs and Wait Unemployment: A Micro Data Analysis," PIDE-Working Papers 2007:20, Pakistan Institute of Development Economics.
    17. Asma, Hyder, 2007. "Employment Preferences and Length of Job Queues in Pakistan: An Update," MPRA Paper 19572, University Library of Munich, Germany.
    18. 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.
    19. Santiago Budria, 2010. "Schooling and the distribution of wages in the European private and public sectors," Applied Economics, Taylor & Francis Journals, vol. 42(8), pages 1045-1054.
    20. Gimpelson, Vladimir & Lukiyanova, Anna & Sharunina, Anna, 2019. "Economics and Politics of the Public-Private Wage Gap (The Case of Russia)," IZA Discussion Papers 12247, Institute of Labor Economics (IZA).
    21. Elisa Birch, 2006. "The public-private sector earnings gap; in Australia: a quantile regression approach," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 9(2), pages 99-123, June.
    22. Ahmed Nawaz Hakro & Yaseen Ghulam & Shabbar Jaffry & Vyoma Shah, 2021. "Employment Choices and Wage Differentials: Evidence on Labor Force Data Sets from Pakistan," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 64(1), pages 199-216, March.

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