Informal Labour Markets in Pakistan

Ali Choudhary, Saima Naeem and Gylfi Zoega

No 75, SBP Working Paper Series from State Bank of Pakistan, Research Department

Abstract: This paper describes the results of a survey of informal-sector firms in Pakistan. Firms belong to the informal sector mainly because of scarce financial resources. There are significant differences in the level of wages and the flexibility of wages with the informal sector having both lower wages and greater flexibility than the formal sector. While minimum wages are less binding in the informal sector, a sort of indexation of wages to inflation is more common. In spite of these differences the reasons for not cutting wages in a recession are similar between the two sectors.

Keywords: Informal sector; wage setting; wage rigidity. (search for similar items in EconPapers)
JEL-codes: E24 E26 J31 J46 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2016-04
New Economics Papers: this item is included in nep-iue, nep-lma and nep-mac
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Related works:
Working Paper: Informal Labour Markets in Pakistan (2016)
Working Paper: Informal Labour Markets in Pakistan (2015)
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