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Earnings Differential between Public and Private Sectors in Pakistan

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  • Zafar Mueen Nasir

    (Pakistan Institute of Development Economics, Islamabad.)

Abstract

The paper explores the earnings differential between public and private sectors in Pakistan. The private sector is further divided into formal and informal sectors for comparison purposes. It utilises an expanded version of the human capital model to determine important determinants of earnings in each sector. Using standard technique, the earnings are decomposed into two parts, i.e., differential due to personal characteristics and due to earnings structure of the particular sector. The Labour Force Survey 1996-97 is used for the analysis of wage differential. Results indicate that workers in public sector earn more than both private formal as well as informal sector workers. These earnings are higher due to their superior personal human capital endowment; however, the wage structure of the public sector is not helping them. The informal sector workers are earning lower than both public sector and private formal sector workers due to both personal characteristics and wage structure of the informal sector.

Suggested Citation

  • 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.
    • Handle: RePEc:pid:journl:v:39:y:2000:i:2:p:111-130
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    File URL: http://www.pide.org.pk/pdf/PDR/2000/Volume2/111-130.pdf
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    References listed on IDEAS

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    Cited by:

    1. Zafar Mueen Nasir & Nasir Iqbal, 2009. "Employers Size Wage Differential: Does Investment in Human Capital Matter?," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 48(4), pages 509-521.
    2. Syed Kanwar Abbas & Asad Zaman, 2005. "Efficiency Wage Hypothesis—The Case of Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 44(4), pages 1051-1066.
    3. Mohammad, Irfan, 2000. "Youth employment and unemployment in Pakistan - an overview of 1990's," MPRA Paper 38154, University Library of Munich, Germany.
    4. 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.
    5. Zafar Mueen Nasir, 1999. "Do Private Schools Produce More Productive Workers?," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 38(4), pages 937-954.
    6. Shabbar Jaffry & Yaseen Ghulam & Vyoma Shah, 2006. "Inter-industry Wage Differentials in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 45(4), pages 925-946.
    7. Asma Hyder & Barry Reilly, 2005. "The Public and Private Sector Pay Gap in Pakistan: A Quantile Regression Analysis," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 44(3), pages 271-306.
    8. Ahmed SALAMA, 2017. "Daily Wages Comparison For Wage Employees In The Public And Private Sectors In Palestine," Network Intelligence Studies, Romanian Foundation for Business Intelligence, Editorial Department, issue 10, pages 97-105, December.
    9. Asma, Hyder, 2007. "Employment Preferences and Length of Job Queues in Pakistan: An Update," MPRA Paper 19572, University Library of Munich, Germany.
    10. Muhammad Irfan, 2010. "A Review of the Labour Market Research at PIDE 1957-2009," PIDE Books, Pakistan Institute of Development Economics, number 2010:1 edited by Rashid Amjad & Aurangzeb A. Hashmi.
    11. Nadeem Ul Haque & Musleh-ud Din & Lubna Hasan, 2007. "Research at PIDE: Key Messages," PIDE Books, Pakistan Institute of Development Economics, number 2007:2.
    12. repec:pru:wpaper:33 is not listed on IDEAS
    13. Nadeem ul Haque & Musleh ud Din (ed.), 2020. "Public Sector Efficiency: Perspectives on Civil Service Reform," PIDE Books, Pakistan Institute of Development Economics, number 2020:4, December.
    14. 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.
    15. Mohammad, Irfan, 1999. "Skills development and competitiveness - the role of HRD," MPRA Paper 38379, University Library of Munich, Germany.
    16. Hasan, Syed Akif & Subhani, Muhammad Imtiaz & Osman, Ms. Amber, 2012. "Disparity in the structure of wages in Pakistan," MPRA Paper 37664, University Library of Munich, Germany.
    17. 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.
    18. Nadeem ul Haque & Musleh Ud Din (ed.), 2006. "Public Sector Efficiency Perspectives On Civil Service Reform," PIDE Books, Pakistan Institute of Development Economics, number 2006:2.

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