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

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  • Kumara, Ajantha Sisira

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.

Suggested Citation

  • Kumara, Ajantha Sisira, 2015. "Wage Differentials in Sri Lanka: The case of a post-conflict country with a free education policy," MPRA Paper 68068, University Library of Munich, Germany, revised 25 Nov 2015.
    • Handle: RePEc:pra:mprapa:68068
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    References listed on IDEAS

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    Cited by:

    1. Prathi Seneviratne, 2017. "Explaining Changes in Sri Lanka’s Wage Distribution, 1992-2014: A Quantile Regression Analysis," Working Papers 2017-01, Carleton College, Department of Economics.

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    More about this item

    Keywords

    Education; Equality; Household surveys; Instrumental variables; Micro-data; Quantile Regression; Returns; Sample-selection; Sri Lanka; Wage rates;
    All these keywords.

    JEL classification:

    • I0 - Health, Education, and Welfare - - General
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education

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