Wage Differentials in Sri Lanka: The case of a post-conflict country with a free education policy

Ajantha Kumara ()

MPRA Paper from University Library of Munich, Germany

Abstract: This study analyses wage differentials in Sri Lanka by the individuals’ educational attainment. The wage returns to education are estimated by using a combination of the techniques of ordinary least-square, two-stage least-square, sample-selection, and quantile regression on micro-data of the Sri Lanka Labour Force Survey-2013. Therefore, the estimates provided by this study are representative of the entire country and corrected for both the endogeniety and the sample-selection biases. The study concludes that education generates a positive impact on private earning. The results show that one additional year of schooling increases hourly wage rate by 9% approximately. Also, according to the results, the primary and secondary education reduces income inequality among people whereas the bachelor’s-degree University education is a contributor to the income inequality. Further, the results relating to the additional controls reveal that the male, urban, and the public sector employees earn relatively higher wage returns.

Keywords: Education; Equality; Household surveys; Instrumental variables; Micro-data; Quantile Regression; Returns; Sample-selection; Sri Lanka; Wage rates (search for similar items in EconPapers)
JEL-codes: I0 I24 I26 (search for similar items in EconPapers)
Date: 2015-11-02, Revised 2015-11-25
New Economics Papers: this item is included in nep-edu
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Citations: View citations in EconPapers (1)

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