The Public Sector Pay Gap in Pakistan: A Quantile Regression Analysis
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.
|Date of creation:||Jul 2005|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +44 (0) 1273 678889
Fax: +44 (0)1273 873715
Web page: http://www.sussex.ac.uk/economics
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.:
- Andrews, Donald W K & Schafgans, Marcia M A, 1998. "Semiparametric Estimation of the Intercept of a Sample Selection Model," Review of Economic Studies, Wiley Blackwell, vol. 65(3), pages 497-517, July.
- 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.
- Fortin, N.M. & Lemieux, T., 1996.
"Rank Regressions, Wage Distributions and the Gender Gap,"
Cahiers de recherche
9607, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
- Nicole M. Fortin & Thomas Lemieux, 1998. "Rank Regressions, Wage Distributions, and the Gender Gap," Journal of Human Resources, University of Wisconsin Press, vol. 33(3), pages 610-643.
- Fortin, N.M. & Lemieux, T., 1996. "Rank Regressions, Wage Distributions and the Gender Gap," Cahiers de recherche 9607, Universite de Montreal, Departement de sciences economiques.
- Moshe Buchinsky, 1998. "The dynamics of changes in the female wage distribution in the USA: a quantile regression approach," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 13(1), pages 1-30.
- Branko Jovanovic & Michael M. Lokshin, 2004. "Wage Differentials between the State and Private Sectors in Moscow," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 50(1), pages 107-123, 03.
- Ronald Oaxaca, 1971.
"Male-Female Wage Differentials in Urban Labor Markets,"
396, Princeton University, Department of Economics, Industrial Relations Section..
- Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
- Joseph Gyourko & Joseph Tracy, 1986.
"An Analysis of Public and Private Sector Wages Allowing for Endogenous Choices of Both Government and Union Status,"
NBER Working Papers
1920, National Bureau of Economic Research, Inc.
- Gyourko, Joseph & Tracy, Joseph, 1988. "An Analysis of Public- and Private-Sector Wages Allowing for Endogenous Choices of Both Government and Union Status," Journal of Labor Economics, University of Chicago Press, vol. 6(2), pages 229-53, April.
- Rees, Hedley & Shah, Anup, 1995. "Public-Private Sector Wage Differential in the U.K," The Manchester School of Economic & Social Studies, University of Manchester, vol. 63(1), pages 52-68, March.
- Heckman, James J, 1990. "Varieties of Selection Bias," American Economic Review, American Economic Association, vol. 80(2), pages 313-18, May.
- Moulton, Brent R, 1990. "A Reexamination of the Federal-Private Wage Differential in the United States," Journal of Labor Economics, University of Chicago Press, vol. 8(2), pages 270-93, April.
- Jorge Saba Arbache & Andy Dickerson & Francis Green, 2004. "Trade Liberalisation and Wages in Developing Countries," Economic Journal, Royal Economic Society, vol. 114(493), pages F73-F96, 02.
- Mueller, Richard E., 1998. "Public-private sector wage differentials in Canada: evidence from quantile regressions," Economics Letters, Elsevier, vol. 60(2), pages 229-235, August.
- Gregory, Robert G. & Borland, Jeff, 1999. "Recent developments in public sector labor markets," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 53, pages 3573-3630 Elsevier.
- Heckman, James, 2013.
"Sample selection bias as a specification error,"
Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
- van der Gaag, Jacques & Stelcner, Morton & Vijverberg, Wim, 1989. "Wage Differentials and Moonlighting by Civil Servants: Evidence from Cote d'Ivoire and Peru," World Bank Economic Review, World Bank Group, vol. 3(1), pages 67-95, January.
- Albrecht, James & Björklund, Anders & Vroman, Susan, 2001.
"Is There a Glass Ceiling in Sweden?,"
IZA Discussion Papers
282, Institute for the Study of Labor (IZA).
- Terrell, Katherine, 1993. "Public-private wage differentials in Haiti Do public servants earn a rent?," Journal of Development Economics, Elsevier, vol. 42(2), pages 293-314, December.
- Evangelos M. Falaris, 2004.
"A Quantile Regression Analysis of Wages in Panama,"
04-01, University of Delaware, Department of Economics.
- Blackaby, D. H. & Murphy, P. D. & O'Leary, N. C., 1999. "The payment of public sector workers in the UK: reconciliation with North American findings," Economics Letters, Elsevier, vol. 65(2), pages 239-243, November.
- 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.
- David Brownstone & Robert Valletta, 2001. "The Bootstrap and Multiple Imputations: Harnessing Increased Computing Power for Improved Statistical Tests," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 129-141, Fall.
- Adamchik, Vera A. & Bedi, Arjun S., 2000. "Wage differentials between the public and the private sectors: evidence from an economy in transition," Labour Economics, Elsevier, vol. 7(2), pages 203-224, March.
- Lee, Lung-Fei, 1983. "Generalized Econometric Models with Selectivity," Econometrica, Econometric Society, vol. 51(2), pages 507-12, March.
- Samer Al-Samarrai & Barry Reilly, 2005. "Education, Employment and Earnings of Secondary School-Leavers in Tanzania: Evidence from a Tracer Study," PRUS Working Papers 31, Poverty Research Unit at Sussex, University of Sussex.
- Rebecca M. Blank, 1994. "Social Protection versus Economic Flexibility: Is There a Trade-Off?," NBER Books, National Bureau of Economic Research, Inc, number blan94-1.
- Ajwad, Mohamed Ihsan & Kurukulasuriya, Pradeep, 2002. "Ethnic and gender wagedisparities in Sri Lanka," Policy Research Working Paper Series 2859, The World Bank.
- van der Gaag, Jacques & Vijverberg, Wim, 1988. "A Switching Regression Model for Wage Determinants in the Public and Private Sectors of a Developing Country," The Review of Economics and Statistics, MIT Press, vol. 70(2), pages 244-52, May.
- Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
- Reimers, Cordelia W, 1983. "Labor Market Discrimination against Hispanic and Black Men," The Review of Economics and Statistics, MIT Press, vol. 65(4), pages 570-79, November.
When requesting a correction, please mention this item's handle: RePEc:pru:wpaper:33. 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: (Russell Eke)
If references are entirely missing, you can add them using this form.