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Schooling is Associated not only with Longrun Wages, but also with Wage Risks and Disability Risks: The Pakistani Experience

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  • Asma Hyder

    (Karachi School for Business and Leadership, Pakistan)

  • Jere R. Behrman

    (Population Studies Centre at the University of Pennsylvania, Philadelphia, USA)

Abstract

Many studies document significantly positive associations between schooling attainment and wages in developing countries. But when individuals enter occupations subsequent to completing their schooling, they not only face an expected work-life path of wages, but a number of other occupational characteristics, including wage risks and disability risks, for which there may be compensating wage differentials. This study examines the relations between schooling on one hand and mean wages and these two types of risks on the other hand, based on 77,685 individuals in the labour force as recorded in six Labour Force Surveys of Pakistan. The results suggest that schooling is positively associated with mean total wages and wage rates, but has different associations with these two types of risks: Disability risks decline as schooling increases but wage risks, and even more, wage rate risks increase as schooling increases. The schooling-wage risks relation, but not the schoolingdisability risks relation, is consistent with there being compensating differentials.

Suggested Citation

  • Asma Hyder & Jere R. Behrman, 2011. "Schooling is Associated not only with Longrun Wages, but also with Wage Risks and Disability Risks: The Pakistani Experience," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 50(4), pages 555-573.
    • Handle: RePEc:pid:journl:v:50:y:2011:i:4:p:555-573
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    References listed on IDEAS

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    Cited by:

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    More about this item

    Keywords

    Wages; Risks; Labour Markets; Job Disabilities; Compensating Differentials; Developing Country; Schooling;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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