Wage Differentials, Rate of Return to Education, and Occupational Wage Share in the Labour Market of Pakistan

Asma Hyder
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Asma Hyder: PIDE
Authors registered in the RePEc Author Service: Asma Hyder Baloch

Labor Economics Working Papers from East Asian Bureau of Economic Research

Abstract: This paper examines the magnitude of public/private wage differentials in Pakistan using data drawn from the 2001-02 Labour Force Survey. Pakistan Labour Force Survey is a nationwide survey containing micro data from all over the country containing demographic and employment information. As in many other countries, public sector workers in Pakistan tend to have higher average pay and educational levels as compared to their private sector counterparts. First, this paper presents the inter-sectoral earning equations for the three main sectors of the economy, i.e., public, private, and state-owned enterprises. These results are further decomposed into treatment and endowment effect. To examine the role of human capital in wage gap, the rate of return to different levels of schooling is calculated. These rates of return to education may be important for policy formulation. The relative earning share is also worked out to look into the distribution of wages across the occupational categories. The earning equations are estimated with and without correction for selectivity, which is also the main objective of the study, i.e., to find out if any non-random selection is taking place within these three sectors of employment.

Keywords: Wage Differentials; Rate of Return to Education; Public Sector Labour Markets (search for similar items in EconPapers)
JEL-codes: J24 J32 J45 (search for similar items in EconPapers)
Date: 2007-01
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Citations: View citations in EconPapers (7)

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Related works:
Working Paper: Wage Differentials, Rate of Return to Education, and Occupational Wage Share in the Labour Market of Pakistan (2007)
Working Paper: Wage Differentials, Rate of Return toEducation, and Occupational WageShare in the Labour Market of Pakistan (2007)
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